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Brian Sozzi Makes Bearish Call On Wal-Mart

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Brian Sozzi, CEO and chief equities strategist of Belus Capital Advisors, shared his bearish thoughts on Wal-Mart's (NYSE: WMT) stock value Monday night on CNBC's Fast Money.

“I think of Wal-Mart as the absolute loser stock. If you want to lose money, go invest in Wal-Mart in 2014, because I think you're going to get an earnings warning from them in the middle of February,” said Sozzi.

“In terms of the economy, you're having Walmart moms in America navigating isles, two trading downs in category, so much so that Wal-Mart has now had to introduce a lower priced brand in price first. Secondarily, they're not shopping the whole store. Wal-Mart…is lower in prices by $1 billion. They need customers to shop the entire store. They're not.”

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Sozzi is also worried about margins, stating that Wal-Mart's inventory has been outpacing its sales for over four quarters, causing a massive inventory build. Last quarter, the company's inventory build was at five percent, a trend that seems destined to continue.

“You're asking for a premium to pay for a stock that's [had] two earnings warnings in 2013, under performance guidance coming in,” said Sozzi.

He sees Wal-Mart as far too expensive at its current evaluation. If Sozzi's prediction comes true and an earnings warning comes from their camp by mid February, it could be a reflection of the retail market as a whole, and not just the savings giant.

“Look for catalysts in this richly valued consumer sector. Foot Locker, Dick's Sporting Goods, Best Buy—they're winning; product innovation cycle,” said Sozzi.

Jason Cunningham had no position with the mentioned entities while writing this article. Visit Jason on Twitter at @JasonCunningham and @Benzinga.

Check out the Benzinga broadcast with Brian Sozzi's interview below:

Posted-In: Bear Brian Sozzi CNBC CNBC's Fast MoneyCNBC Long Ideas Short Ideas Economics Media Trading Ideas Best of Benzinga

 

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