The loudest alarm I think is their food sales. With food inflation clearly on the rise and Wal-Mart making 51% of their revinue from food in 2010 I think the revinue will get a nice lift that hasn't been baked into the stock. With commodity prices spiking other food retailers will have to raise prices or get their margins crushed. Wal-Mart may raise prices a bit but they'll still probably be cheaper than the rest. The secret weapon is Wal-Marts "Great Value" line. A lot of no frill lines force people to sacrifice taste for that lower price they get on the products. Not Wal-Mart.
I shop at Wal-Mart like, we all do, and lately I've seen more and more people with more and more Great Value products in their carts. Not bummy looking people either. People who look like they can afford the big names but chose Great Value instead. And it's not just food, Wal-Mart's "Equate" brand sells every thing from aspirin to lotion. In the aspirin the dosage is the same as the big named brands, and the cold meds have the same active ingretients. While the stock market is rising, peoples incomes aren't, and people feel it at the cash register. Wal-Mart closed today at $55.36 14x next years earnings. They report November 16 2010 which is in a couple of weeks. They're expected to earn .90 for the quater, and $4.02 for the year, up from $3.66 last physical year.. I don't like buying stocks prior to earnings and holding through them, but here I made an exception mainly due to the charts.
Over all Wal-Mart I think will be a frequent stop and resting place for cash in the search for yield world wide. With a 2.20% yield I'd say it's secure. I don't buy stocks strictly for yield so I do think the stock will move. With the $15 Billion dollar buy back plan from last year over and done, I think the buying in the past six sessions signals accumulation. Either way this is a good company, under good management, with good looking charts, that's enough for me. I'm in.