Andrew Corn Says Buy Wal-Mart Shares

Simply put, Wal-Mart Stores Inc. (NYSE:WMT) is the world’s largest retailer by revenue with over two million employees and north of $400 billion in revenues. The firm is the poster child for bricks and mortar and its shares are down YTD. WMT is the grizzly bear in the room and cannot be ignored. Without many acquisitions, it has grown organically in an exponential fashion.

First up, why do you care who Andrew Corn is and what credibility does he have?  Andrew Corn is the Chief Investment officer at  Equities  Beacon Trust Company. Mr. Corn runs the equity investment team at Beacon Trust managing six long only strategies and a long/short fund. He also serves on the senior management team of Beacon Trust and reports to his former Chairman Fred Fraenkel who is now Vice Chairman at Beacon Trust Company.Prior to joining Beacon Trust Company, Corn was the founder and Chief Investment Officer of Clear Asset Management. He developed the vision and premise of the firm's multifactor models, investment process, and trading strategy. Until May 2004, he was SVP of TheStreet.com and its institutional broker-dealer subsidiary, Independent Research Group Inc.

Sell Amazon, Buy Wal-Mart

(BeaconIdeas.com) It can be challenging to part with a stock that has performed so well and to hold another that has lagged all year. Yet I have sold Amazon.com (NasdaqGS: AMZN) and am holding Wal-Mart (NYSE: WMT).

Sure one stock is a Consumer Discretionary and the other a Consumer Staple so the two firms are not truly a direct comparison. Looking carefully; they are both low price retailers known for efficient back ends used to deliver products on the cheap. Yet they compete on different fields; Wal-Mart by car and Amazon by click. The world is changing as I observe these companies seeping into each other’s territories, tactics, and markets. This may accelerate direct competition.

Amazon has been the poster child for the Internet age. No bricks and mortar, no pricy real estate and consistently aiming for lower overhead in every phase of its value chain. This theoretically should allow Amazon to be the low cost and high profit provider. Its margins have always come under analyst scrutiny and continue to hold back earnings growth. Additionally, by use of the web and partnerships on the web, it can offer every product imaginable assuming it can procure it, or have it dropped shipped based on client/vendor contracts. The firm through its expansive web presence and technology has embraced cloud computing enabling other firms to use Amazon’s back end to manage their on-line presence. Now a maturing company with over 20,000 employees and massive state-of-the-art warehouses, the firm posted 2008 revenue over $19 billion. My investors benefited nicely holding the stock this year far out pacing the Consumer Discretionary Index as well as the S&P 500.

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