Berkshire Hathaway Inc. is investing in Wal-Mart Stores Inc. more than rival discounter Target Corp. Berkshire owns some 19.9 million shares, roughly worth $960 million.
Because:
1. The price of the Wal-Mart stock is attractive because it has fallen 17%, to 48, over the past five years as sales have slipped and operating costs have ballooned.
2. Wal-Mart’s management is making moves to get shoppers back - aggressively remodeling stores, changing its selection in high-margin categories such as consumer electronics, and tweaking the direction of women's apparel. 3. Wal-Mart is also trying to keep a lid on costs by pushing more of its manufacturing offshore, reducing inventory, and reining in store openings.
4. Wal-Mart’s international business, making a significant portion of money overseas, is appealing because of the gathering weakness of the U.S. dollar from the ballooning current-account deficit.
Perhaps the giant is coming back to life.
[Click here for full story at: BUSINESSWEEK.COM]
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