Company Report: investments

COMPANY BACKGROUND

Sam Walton founded Wal-Mart in 1962 in Rogers , Arkansas . The company was built around Sam Walton 's business philosophy of attracting customers with low prices while providing them with good customer service . Starting from small towns in the South and Midwest of the Unites States , Wal-Mart expanded into the larger cities and eventually worldwide . Wal-Mart became listed on the New York Stock Exchange on August 25 , 1972

Wal-Mart operates various kinds of retail stores both in the Unites States and internationally . In the Unites States , Wal-Mart operates under

two segments . The first segment includes the Wal-Mart stores which encompass discount stores , super centers , and neighborhood markets . Wal-Mart is also present on the World Wide Web at Walmart .com Wal-Mart stores offer a wide variety of products (e .g . shoes , clothes food , and toys ) and services (e .g . photo processing and health and beauty aids ) that appeal to the whole family . The second segment includes the Sam 's Club stores , which include the warehouse membership clubs in the United States and Samsclub .com . As of July 31 , 2005 Wal-Mart operated 1 ,276 Wal-Mart stores , 1 ,838 super centers , 92 neighborhood markets , and 556 Sam 's Clubs in the United States Internationally , Wal-Mart operates in many countries such as Canada Brazil , Mexico , and South Korea

The Walton family is Wal-Mart 's largest shareholder with 40 .4 of the company 's outstanding shares . As of September 30 , 2005 , the three largest institutions holding Shares of Wal-Mart were Barclays Global Investors Intl (2 .9 of shares outstanding , Fidelity Management Research Co (2 .4 of shares outstanding , and State Street Global Advisors (1 .9 of shares outstanding . As of June 30 , 2005 , the mutual funds with the most stake in Wal-Mart were Vanguard 500 Index Fund (0 .8 of shares outstanding , Fidelity Magellan Fund (0 .5 of shares outstanding , and Spdr Trust (0 .4 of shares outstanding

Following are a few numbers showing the magnitude of Wal-Mart 's operations . Wal-Mart counts 1 .2 million full-time and part-time associates in the United States and serves 100 million American customers every week . Worldwide , Wal-Mart counts 1 .7 million full-time employees . Global sales in 2004 reached 285 billion . In the United States , it is estimated that Wal-Mart sales account for 8 of retail sales (excluding automobiles . Today , Wal-Mart is the dominant player in the American retail industry and is continuing to expand . Wal-Mart is known as a major blue chip

MAJOR FACTORS

1 ) Valuation (as of December 2 , 2005

A comparative analysis of Wal-Mart 's price ratios shows that Wal-Mart 's valuation is in line with its competitors , industry , and the S

500 . A closer look into the

/Sales ratio reveals that Wal-Mart may be undervalued if compared to the S

500 . Wal-Mart 's

/Sales ratio (0 .67 is less than half the S

500

/Sales ratio (1 .50 . This relatively low br

/Sales ratio may indicate that investors are expecting lower revenue growth from Wal-Mart and its competitors than...