New Index Tracks Suppliers To Wal-Mart

Tuesday, 19 Dec 2006 | 2:38 PM ET

With Wal-Mart approaching nearly a billion dollars in sales a day, its no surprise that many companies earn a significant portion of their annual revenues from supplying Wal-Mart stores. This unique relationship between retail giant and its top vendors is now tracked in a brand new index, offered by the International Securities Exchange and Revere Data.

Wal-Mart Index
Wal-Mart is approaching a billion dollars in sales a day, and many companies gain a significant portion of their annual revnues from supplying Wal-Mart stores. A new index tracks Wal-Mart suppliers, and Richard Hastings, Bernard Sands Senior Retail Analyst; Kevin O'Brien, Revere Data CEO; and CNBC's Sue Herera discuss the details of the Wal-Mart Supplier index.

Can investors make money off this index? CNBC’s Sue Herera found out today on ‘Power Lunch.”

Revere CEO Kevin O'Brien explained his company tracks about 270 suppliers for Wal-Mart . The index tracks the overall price performance of 30 firms that drive 16% - 74% of their annual revenue from Wal-Mart. It goes across a number of sectors including electronics and toys.

Here are the top five suppliers that are dependent on Wal-Mart.

HDL - Handleman Company 74%
COT - Cott Corporation 40%
CHTT - Chattem Inc. 34%
CNXS - CNS, Inc. 31%
CALM - Cal-Maine Foods, Inc. 31%

Richard Hastings, Senior Retail Analyst with Bernard Sands said he would find this kind of index very useful. But he added, that the index also needs to pick up on the supermarket vendors such as Nestle and Unilever that trade in US markets on an ADR basis.

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Kenny Polcari