Bobby Edgerton, Money Manager at Capital Investment Companies, says Wal-Mart Stores, Inc. (WMT) is an an undervalued company with plenty of cash and little to no debt.
“I concentrate on the world’s best companies with the world’s best balance sheets. I am a balance-sheet man first and foremost,” Edgerton says.
Edgerton buys the world’s best companies, but he aims to buy them when they are down and out of favor, like Wal-Mart is presently.
“The market hates Wal-Mart. Every hot stock in the stock market right now at some point was out of favor. I am a contrarian first and foremost, because when a stock goes down, that’s probably the biggest tip off of it getting cheap,” he says.
Bobby Edgerton
Edgerton believes the most misunderstood issue surrounding Wal-Mart right now is how much Amazon is supposedly hurting the company.
“It could be misunderstood when you are thinking so short term,” Edgerton says. “I think Wal-Mart has been totally wiped out in that the market value of Wal-Mart is $180 billion. The land, building, plant and equipments on the books are at $170 billion cost. They own about 88% of the North American location. It’s a real estate empire. People are not going to stop going to malls. They are not going to just stay home and buy everything online.”
“I think a lot of times people just get too exuberant about Amazon’s growth, although I like Amazon, but when they get down on Wal-Mart, they get so down that they value the company at probably less than the real estate,” he adds.
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