Alpha Algorithm Piles into a Global Retailer

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

This week’s Alpha Algorithm recommendation is a position that made an appearance in several new strategies this week. Like many other dividend-paying blue chips, Wal-Mart Stores Inc. (WMT) has outperformed the broader S&P 500 by a wide margin, making a particularly strong move to the upside in mid-May.

Founded in 1945 and headquartered in Bentonville, Arkansas, Wal-Mart Stores, Inc. operates retail stores in three segments: Walmart U.S., Walmart International and Sam’s Club. As of January 31, 2016, it operated 11,865 stores under 63 banners in 28 countries and e-commerce websites in 11 countries.


 Wal-Mart versus the S&P 500 Year to Date

 Seven Top Investment Strategies Betting on Wal-Mart Stores Inc. (WMT)

  1. Float Shrink

The company has reduced its shares outstanding over the prior 120 days while meeting criteria for shareholder friendliness, profitability measured by free cash flow and leverage ratio.

  1. Fundamental Strength

It is a top U.S. stock based on fundamentals measured by book value, cash flow, sales and dividends.

  1. Dividend Aristocrat

The stock is among those in the S&P 500 that have increased dividends for at least 25 consecutive years.

  1. Dividend Dog

 It is one of the five highest-yielding stocks among each of the 10 sectors tracked in the S&P 500.

  1. High and Steady Dividend

The stock is one of 50 dividend-paying companies from the S&P 1,500 Composite Index that has increased dividends for at least 20 consecutive years.

  1. Small-Cap/Value Tilt

The stock was selected using a multi-factor modeling approach.  It is a smaller-cap or value stock designed to enhance portfolio risk/return characteristics.

  1. Broker’s Best

One of Raymond James’ selection of stocks expected to outperform the S&P 500 over either a six- or 12-month period.


 Buy Wal-Mart Stores Inc. (WMT) at market today. Place your initial stop at $64.50.


Since I tend only to recommend options when the stock has pulled back in the midst of an uptrend, I am holding off on recommending options this week.

Portfolio Update

With AbbVie (ABBV) pulling back and recovering slightly yesterday, I recommend that you buy the August $60 call options (ABBV160819C00060000), which last traded at $3.06 and expire on Aug. 19, to profit from this move.

Many of your other positions are currently technically oversold and due for a bounce. I would expect there to be a strong rebound once the uncertainty surrounding the United Kingdom’s vote to leave the European Union is resolved by next Friday.

Nicholas Vardy

Nicholas A. Vardy

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