Is Wal-Mart stock a buy?

The shares are cheap, especially when you look at the stock's forward P/E.

By Kim Peterson Jul 14, 2010 2:16PM

Shares of Wal-Mart (WMT) -- like many of the items on its shelves -- are dirt cheap.

The stock is in the $50 range right now, having just rebounded from a low of around $48. And while that may not sound too cheap, consider that the stock is trading at a mere 11.4 times expected earnings for the next year.

Compare that to Costco (COST), which is at a 17.4 forward P/E.  Amazon's (AMZN) is 31.2. Target's (TGT) P/E is in the same ballpark as Wal-Mart's.

Wal-Mart knows a good deal when it sees one, and has been buying its own shares at a fast clip, reports Sandra Ward for Barron's. "Wal-Mart's market value, at $182 billion, is now less than half its revenue, a stunningly low ratio," she writes.

The retailer bought about $3 billion of its shares in the first quarter, up from $900 million in the year-ago period, Ward writes. The board announced a big buyback plan in June.

"It's the kind of company and stock where the downside is protected," one portfolio manager told Barron's. "At some point, there'll be a revaluation."

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