With business practices at Wal-Mart being called into question, you're probably wondering how to trade the retailer’s stock, especially after Monday's sharp pullback.
Warren Buffett likes to say be greedy when others are fearful; however, given these extenuating circumstances, does that axiom even apply?
As you likely know, Wal-Mart's big decline was triggered by aNew York Times report that said the company violated the Foreign Corruption Practices Act by paying off Mexican officials who oversaw the company's expansion plans.
That sounds pretty serious. What should you do?
“I don’t see how this can be anything but an overhang,” says Fast Money trader Brian Kelly. He tells us he can’t make any compelling case for pulling the trigger. “You could wake up one morning and find out the story is worse, much worse. I’d just stay far away. There are plenty of other places in retail that you can put money to work.”
If you’re looking for a retail trade, money pro Mike Murphy says check out the dollar stores on Monday’s weakness.
Last year, in the face of economic weakness, dollar stores won audience away from Wal-Mart. If investors pull money out of Wal-Mart but want to stick with the same theme, that money could go into dollar stores.
“Generally, dollar stores may be a great place to play,” Murphy says.