Research archive for MSM

Another one that has done the rounds more than a Jozi security guard is the rumour that Wal-Mart are sniffing over at Massmart. Massmart released a sales trading update two days ago which looked good, inflation across their product range much lower and sales over eight percent. A big gap has opened up. Massmart now trades on an earnings multiple of twenty times. Analysts surveyed are expecting the company to make less than six bucks this year, seven bucks next year and 870 cents the year after that, 2012. Is this a case of the markets having got it wrong? Or has Massmart been rerated to their international emerging market peers. Wal-Mart Mexico trades on 29 times earnings. Costco trades on 22 times earnings. Tesco who are active in emerging markets trade on nearly 15 times earnings.

Massmart downgraded by formerly the US government Bank of America Merrill Lynch. BoFA ML. Jumble that around a little, the FAL MoB. Whatever, the analyst 12 month price target moves up to nearly 99 bucks, the stock trades 9 bucks higher than that. Does it mean anything other than someones 12 month price target is above where they suspect the stock ought to trade. That tells me about all I need to know, the time frames for owning the stock are way too short. Five years time, well nobody is going to give you that sort of view, that is just way too hard.