With a long track record of picking top-performing stocks, the analysts at Stansberry Research have a knack for finding value where others cannot. From a recent article posted on the publisher’s website, one example of this is their recommendations on Walmart. According to the article, even though the company’s stock has lost value and many are selling it, the retailer still provides a potentially profitable opportunity to investors who are willing to look past share price and buzz. Hidden within the details of Walmart’s fundamentals, says the article’s author, Justin Brill, a different story can be found.
Brill’s piece delves into the history of Stansberry Research’s recommendations of Walmart as an investment opportunity, specifically by the editor of their “Extreme Value” monthly investment newsletter, Dan Ferris. According to the article, Ferris first recommended Walmart to his subscribers in October of 2006. Those that followed the advice to get in on Walmart at that time were able to grow their investment by 100% or more over the years that followed. After almost a decade of being a recommended investment, Ferris ended his recommendation for investing in Walmart in February of 2015. At that time, he felt the valuation of the company’s shares precluded it from the same growth rate it had previously experienced. This prediction proved correct as shares in the large retailer fell by as much as 35% over the following months.
This type of foresight is not uncommon for the editors and analysts at Stansberry Research. Founded in 1999 by Porter Stansberry, the publisher of financial newsletters and information has built an almost 20-year tradition of providing their subscribers with solid investment advice. With a current subscriber base of over 500,000 readers, 70,000 of whom have a lifetime subscription, the publisher’s advice is clearly finding an appreciative audience.
The value Stansberry Research offers its readers is no small feat. Driven by guidelines that underscore a commitment to quality and evenhandedness, the company works hard to ensure that their contributors represent some of the brightest minds in the financial world. In fact, the publisher prides itself on letting the voice of its editors and analysts come through in its newsletters and articles. Rather than speak with one authoritative view on the market, Stansberry Research prefers to publish a mosaic of opinions that give a more diverse range of investment opportunities for investors.
The recent article on Walmart is just one example of the publisher’s ability to use research and sound fundamentals to present insights that are unconventional yet effective. As the article details, many investors have become spooked by the performance of Walmart’s shares, in light of a single-day drop of almost ten percent. Of course, it’s understandable that such a steep decline might provoke hesitancy, especially when coupled with expectations that the retailer’s earnings this fiscal year will underperform many Wall Street estimates. But striking a contrast to this atmosphere of concern, Ferris has once again begun recommending that investors consider purchasing shares of Walmart.
The foundation of this recommendation hinges on a closer look at Walmart’s business model, as well as the broader direction of the retail industry. It has become almost gospel of late to think of the retail sector as inevitably heading toward a model that is primarily based on online sales. Naturally, the retailer Amazon is the largest player in this arena and is often put forth as the epitome of the new face of retail in the US. However, Ferris argues, this is a false assumption.
The article goes on to describe how roughly ninety percent of US retail sales are still conducted in physical stores. Instead of a purely online model, Ferris says, the retail industry is actually moving toward an omnichannel model. That is, retail stores will find the greatest success when offering purchasing options to their customers both online and also in brick and mortar stores. This insight is underscored by the fact that even Amazon itself is starting to operate physical retail stores in the country.
What to Know
The key takeaway from the article, however, is that while Walmart has the resources to catch up to Amazon in terms of online presence, Amazon still has a long way to go to match Walmart’s immense real-estate holdings. This is in light of the fact that Walmart’s combined stores account for a total area of more than 1.1 billion square feet, which is roughly ten times the physical space that Amazon owns, including data centers, fulfillment centers, and other real estate holdings.
Again, these valuable, yet non-obvious, insights from Ferris typify the advice for which Stansberry Research has become known. In fact, the publisher’s founder, Porter Stansberry, has built part of his reputation on predicting the credit crisis at a time when most were still oblivious to the changing state of the US financial sector. This capacity for anticipating key changes in financial markets is a large factor in how Stansberry Research attracts and maintains its subscriber base.
Importance of Evaluation
Of course, insights are nothing if they are not subject to evaluation. For this reason, Stansberry Research places a sizable emphasis on transparency in everything it does (YouTube). The company believes that all investment advisors have a responsibility to provide an accounting of the outcomes of their advice. Not only does this protect investors from unsound advice, but it also shows the relative value a publisher provides to its subscribers. To fulfill this pledge, Stansberry Research publicly evaluates all of its investment recommendations each year and includes track records in each monthly issue of its investment newsletters.
The recent article on the publisher’s website exploring the unique investment opportunity presented by Walmart is just one example of the high-level investment advice subscribers have come to expect from Stansberry Research. Diving into the retailer’s fundamentals and contrasting them with an insightful look at the state of the larger industry provides a nuanced look into an opportunity that many have passed-over in light of other factors. By building on a history of solid analytics, Stansberry Research will continue to offer its subscribers a highly-valued collection of resources from which to inform their decisions on investments.
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