Are Walmart Shares About To Surge?

Over the past 3 months Dow component Walmart has climbed a measly 4% while the Dow itself is up nearly 20%. Is Walmart about to join the party?

Many investors are starting to think Walmart stock is about to explode.

That bullish sentiment largely stems from strong retail sales that came out on Wednesday. Although Walmart no longer report sales on a monthly basis, rivals who do performed surprisingly well.

Excluding autos, retails sales climbed about .05% in September marking the second straight month of gains and beating analyst expectations. (Sales climbed 1% in August.)

Investors took the results to mean consumer spending is starting to grow again and could mean a stronger than expected holiday season.

Gary Kaminsky, former Neuberger Berman managing director, shares that opinion.

"There’s a lot of focus on the unemployed as there should be, but the fact is that most people are employed," says Kaminsky.

Although the consensus for holiday spending is flat to down 1% "I think we’re setting up for a big Christmas," Kaminsky adds.

And it's not only stonger-than-expected retail sales that makes Kaminsky bullish. "While there might not be a direct correlation between the stock market gains and people feeling better I do think (it triggers) a big upside surprise in Christmas sales."

And Kaminsky thinks Walmart stands to benefit in a big way. "Think about the kind of consumer action that was driven by cash-for-clunkers. I correlate that to a Walmart customer."

In other words, he thinks we see the same kind of surge again.
And for many of the same reasons Kaminsky thinks Best Buy , Bed Bath & Beyond as well as Apple will also benefit.

"There’s a lot of pent up demand from people who didn’t spend money but will spend now," he concludes.

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