JBL: The Strong Survive

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.