I put this chart together to demonstrate how you can use TradingView to get a long term perspective of a company by looking at the important factors all on one graphical page.
First, there is the stock price, which you can see went sideways from 1999 until 2012 (13 years sideways).
Second, there is MarketCap, which shows WMT was worth roughly $300 billion back in 1999.
Third is "After-Tax Margin", which is positive the entire time through two major recessions.
Fourth is "Dividend Yield". We all like to earn a return for holding onto an investment.
Fifth is "Shares Outstanding". You can see that WMT is buying back their shares, reducing the supply.
Sixth window is the "Price/Sales/Share" which is what do you pay to own WMT as a multiple of the revenues.
The PSR is WMT was once a MIGHTY 2 (monthly closing basis) and has fallen down to a lowly 0.5 now. Revenues keep growing steadily and have risen 6%-7% each year. If you add in that WMT has reduced the number of shares by 3%-4% each year, then sales have grown by roughly 10% per year. Add to the mix that WMT always makes a profit of at least 3% and you have a very stable company to analyze. Certainly, the future is clouded by their ability to grow and by the internet/Amazon/online challengers, but their performance is solid over the long term.
TradingView gives you the tools to "see" a stock and diagnose where the value is coming from very quickly and easily. These days the market is buying growth in revenues more than real, tangible, after-tax earnings, but that is the nature of markets.
I offer up my equation that I use to value stocks: A "Fair" Price-to-Sales Ratio is the result of "growth of sales (net of shares issued/redeemed) and a profit margin" and then multiply that by 10 to get it to a PSR. So, in Walmart's terms, Sales growth of 10% + 3% profit margins = 13% or .13. Multiply by 10 to get 1.3. In an ideal world, WMT is worth 1.3x's sales. It is trading at 0.5x's Sales now, so it would have to rise by 160% to get to "Fair Value" from this equation. The market is clearly NOT INTERESTED in Walmart at this time.
Tim 11:34AM 8/20/2014 Wednesday
First, there is the stock price, which you can see went sideways from 1999 until 2012 (13 years sideways).
Second, there is MarketCap, which shows WMT was worth roughly $300 billion back in 1999.
Third is "After-Tax Margin", which is positive the entire time through two major recessions.
Fourth is "Dividend Yield". We all like to earn a return for holding onto an investment.
Fifth is "Shares Outstanding". You can see that WMT is buying back their shares, reducing the supply.
Sixth window is the "Price/Sales/Share" which is what do you pay to own WMT as a multiple of the revenues.
The PSR is WMT was once a MIGHTY 2 (monthly closing basis) and has fallen down to a lowly 0.5 now. Revenues keep growing steadily and have risen 6%-7% each year. If you add in that WMT has reduced the number of shares by 3%-4% each year, then sales have grown by roughly 10% per year. Add to the mix that WMT always makes a profit of at least 3% and you have a very stable company to analyze. Certainly, the future is clouded by their ability to grow and by the internet/Amazon/online challengers, but their performance is solid over the long term.
TradingView gives you the tools to "see" a stock and diagnose where the value is coming from very quickly and easily. These days the market is buying growth in revenues more than real, tangible, after-tax earnings, but that is the nature of markets.
I offer up my equation that I use to value stocks: A "Fair" Price-to-Sales Ratio is the result of "growth of sales (net of shares issued/redeemed) and a profit margin" and then multiply that by 10 to get it to a PSR. So, in Walmart's terms, Sales growth of 10% + 3% profit margins = 13% or .13. Multiply by 10 to get 1.3. In an ideal world, WMT is worth 1.3x's sales. It is trading at 0.5x's Sales now, so it would have to rise by 160% to get to "Fair Value" from this equation. The market is clearly NOT INTERESTED in Walmart at this time.
Tim 11:34AM 8/20/2014 Wednesday
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