Wal-Mart Still a Winner

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In the 1950s, Charles E. Wilson, then head of General Motors, famously said, "What's good for General Motors is good for the nation, and vice versa." At the time, GM was the world's largest corporation and largest private employer. The iconic status GM once held in the American economy has long since faded. During the past 10 to 15 years, another behemoth has risen to take its place, and that's Wal-Mart(WMT Quote).

One could make the same statement about Wal-Mart today that Wilson made about GM a half century ago. It's dominant, it's powerful, it's huge. It should come as no surprise that Wal-Mart gets a thumbs up from such guru strategies of mine as Warren Buffett's, which places great value on a company having a dominant market position, and James. P. O'Shaughnessy's, which favors larger companies with steady performance.

With its more than 3,500 discount stores, supercenters, Neighborhood Markets grocery stores and Sam's Club membership warehouse stores; its $288 billion in revenue, about four times that of Home Depot(HD Quote), the second-largest retailer; and 1.5 million employees, Wal-Mart has become a steamroller that seems to be able to take on any and all competitors. Wal-Mart is now the largest toy retailer, CD seller and one of the top two grocery retailers. In just the past couple of weeks, Winn-Dixie, a grocery chain in the Southeast, went into bankruptcy and cited Wal-Mart as a major reason for its doing so.

The O'Shaughnessy strategy gives Wal-Mart a 100% rating, meaning it passes all of the strategy's tests, and the Buffett strategy gives it an 89% rating, just 1 percentage point below what's needed for a top-rated "strong interest" recommendation under that methodology. Wal-Mart's position in its market and the interest of these two guru strategies are, I think, reason enough for you to consider making Wal-Mart part of your investment portfolio.