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Cramer: Walmart Investors Owe CEO Doug McMillon A Big Thank You

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Cramer: Walmart Investors Owe CEO Doug McMillon A Big Thank You

It’s one thing to come up with a turnaround story for a major corporation. But actually implementing that plan and proving it to be a successful one can be very difficult. Wal-Mart Stores Inc (NYSE: WMT) investors should consider themselves among the lucky few investors who have experienced a bona fide turnaround story.

Even the great Warren Buffett once warned investors about betting on turnaround promises.

“We react with great caution to suggestions that our poor businesses can be restored to satisfactory profitability by major capital expenditures,” Buffet said back in 1983. “The projections will be dazzling -- the advocates will be sincere -- but, in the end, major additional investment in a terrible industry is about as rewarding as struggling in quicksand.”

The quicksand has been replaced by rocket fuel for Walmart investors in 2017. The stock is up 40 percent year-to-date, more than doubling the return of the SPDR S&P 500 ETF Trust (NYSE: SPY). The SPDR S&P Retail (ETF) (NYSE: XRT) is down 5.5 percent this year.

CNBC's Jim Cramer recently said Walmart investors should be thanking CEO Doug McMillon, the author of this rare turnaround story with a seemingly happy ending. Following Walmart’s recent blowout quarterly earnings, Cramer told investors how crazy it is for a large cap stock to jump nearly 11 percent in one day.

“But when you consider how much time and thought and effort McMillon put into this resurgence, all you can do is say, 'Congratulations, Mr. McMillon, for your visionary efforts,’” Cramer said.

Walmart investors are hoping the turnaround story continues. Walmart reported 50 percent growth in online sales in the most recent quarter but earned just over 4 percent of total online sales during Cyber Weekend 2016, according to Slice Intelligence.

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Image Credit: MikeMozartJeepersMedia - Own work, CC BY-SA 3.0, via Wikimedia Commons

Latest Ratings for WMT

DateFirmActionFromTo
Jul 2019Initiates Coverage OnBuy
Jun 2019MaintainsOverweight
Jun 2019MaintainsOverweight

View More Analyst Ratings for WMT
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Posted-In: Doug McMillon Jim CramerAnalyst Color Analyst Ratings Media

 

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