JBL: The Strong Survive

Stock quotes in this article: PFE , WMT , MRK  

Analysts, in my opinion, have mistakenly said that oil prices will hurt Wal-Mart sales too much. At $45 a share, that has already been factored in. I believe we have temporarily seen a peak in oil prices. You're already seeing some profits being taken in energy stocks, and I think you will see a sector shift from energy to value. Wal-Mart is now a value play.

And if gasoline prices remain high, consumers will not want to drive to many different stores to shop. In a Wal-Mart Supercenter, consumers can buy everything they need with one stop.

Wal-Mart does have some potential risks. A class-action lawsuit is pending, and Wal-Mart continues to fight against labor organizing. Wal-Mart also is still being protested in certain communities as the dreaded mom-and-pop store killer.

Wal-Mart has a history of winning these fights. However, if labor were to organize, it would hurt the company.

Wal-Mart's biggest advantage is in inventory management. Its recent investment in RFID (radio frequency identification, which will replace the bar code) will pay great rewards.

Wal-Mart shares went above $70 in late 1999 after the company announced plans to launch its Web site; the only problem was the Web site wasn't ready. Wal-Mart since has slowly built a very good Web presence. Wal-Mart's nationwide presence allows consumers to be able to return or to have repaired the merchandise that they buy over the Internet.

I believe there will come a day when one will be able to buy merchandise over the Wal-Mart Web site, and, because of Wal-Mart's huge distribution network, have it delivered the same day.

With EPS estimates of $3, Wal-Mart is trading incredibly cheaply.

I have recently added shares of Wal-Mart to my portfolio, and I shop there often. Look for me in the "big and tall" section.

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At the time of publication, Layfield was long Wal-Mart and Pfizer, although holdings can change at any time.

A former All-America offensive lineman at Abilene Christian University, John Layfield played professional football for the then-Los Angeles Raiders and later in the World League. After wrestling in Japan, Mexico and Europe, Layfield arrived in the WWE in the mid-1990's. A former WWE Champion, JBL was a featured wrester at WrestleMania 21 and can also be seen on Friday Night SmackDown! on UPN.

Outside of the ring, 'JBL' is a self-taught investor who was recruited to write a personal finance book, "Have More Money Now," which was released in the summer of 2003. He has been seen on finance shows on CNN and Fox News Network. He is co-chairman of the Smackdown Your Vote! Campaign and he has joined both the USO and Armed Forces Entertainment (AFE) for tours through Iraq, Afghanistan and other Middle East countries. He regularly visits Walter Reed and Bethesda Naval hospitals to meet with wounded troops.

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