En placotant avec un ami boursicoteur dernièrement,nous avons eu un
"CHAMAILLAGE" au sujet de la vente au détail.
Vous le savez sûrement,c'est un domaine que j'aime bien !
La source de ce brassage d'idées viens d'un texte de FOOL.COM qui
annonce la mort " voir l'afflaibissement" de WALMART dans un horizon de 3 ans.
Le prochain "king" sera Costco Wholesale Corporation
------------------------------------------
The Death of Wal-Mart - The Real Cash King Changing the Face of Retail
For decades, American consumers were on an all-out shopping spree, fueling massive growth in the retail sector.
But now that run is over.
The deepening recession is forcing the nation's biggest retailers, like Macy's and J.C. Penney, to shutter up stores and halt their plans for expansion. And many others, like Circuit City and Linens n' Things, have declared bankruptcy.
This news may sound grim... but it doesn't mean Americans have stopped spending. In fact, there's a handful of retailers that are actually growing revenues and building new stores in this tough economy.
In particular, the "cash cow" Motley Fool bargain hunter and advisor Ron Gross calls "one of the best-run companies in the United States."
But it's not the company you might think it is...
When most people think of recession-proof stocks, retail giant Wal-Mart is usually the first that comes to mind. It's definitely a favorite of the financial media. Kiplinger's and Forbes both point out Wal-Mart's ability to hand investors steady gains throughout deep recessions.
In fact, while most stocks tanked in 2008, Wal-Mart's stock rose 16%! That's a heck of a return...
But be warned! Wal-Mart is NOT the best stock you can buy right now.
Because when the market rebounds and stocks are soaring left and right, you can be sure Wal-Mart won't be among the highflyers.
That's because it's one of the most widely held stocks in the world. It would have to pack on another $200 billion in market cap to double your investment -- a monumental feat, to be sure.
But imagine if you could invest in a business like Wal-Mart -- one that actually attracts more customers in tough economic times. And that cranks out cash no matter how bad things get...
Only imagine that this same business also has a little-known edge. An edge that hands it massive profits that could send its share price sky-high once the market wakes up...
The secret to finding a recession winner
Here's a hint: This "edge" is the same advantage that's allowed investors to make boatloads on Nike and Apple, two of America's most phenomenal growth stories.
And it's the reason GE shareholders were rewarded hand over fist as GE grew into the biggest company in the world.
In a word, it's leadership.
You see, guys like Phil Knight, Steve Jobs, and Jack Welch (not to mention the late Sam Walton) are the kind of focused, aggressive CEOs who can make shareholders rich.
That is, if you can spot them when the time is right. (It's not hard to do, but you have to know what you're looking for.)
Unfortunately, the market meltdown and recent corporate scandals have soured many investors on the idea of investing in old-fashioned values like leadership.
But that's good news for investors like us. Because while the rest of the investing world is ignoring this rock-solid company -- we can snap up shares on the cheap!
So let's dive in and find out what makes this company so special. And why it's a great fit for your portfolio.
Put customers first and success will follow
That's what drives the CEO of our top value company -- and as you'll realize, it's what has the stock price set to soar. With bulldog tenacity, he keeps prices low - making sure his customers come back time after time.
He's so focused on creating bargains, he never allows markups to exceed 14% on any product -- pressuring suppliers to sell for cheap. It's not easy, but "that's why they call it work," he says.
Call it what you will, but it almost guarantees healthy cash generation and consistent growth! In just 26 years it's become the fifth-largest retailer in the U.S.
In fact, this company brought in $71 billion in sales -- last year alone!
These kinds of results led to a No.1 "Specialty Retailer" ranking in Fortune magazine each of the last three years. Now, in 2009, it's the "22nd most admired company in the world."
You're probably familiar with this company and maybe even its CEO. You may even be among his stores' 54 million members. But you might not realize just how big the stock's upside is this very moment.
"The Best Bargain Is the CEO Himself"
That's how Smart Money described the founder and executive, whose base salary is just $350,000. Even with a $200,000 cash bonus, his half-million-dollar salary is shockingly low. Especially when you consider the $18 billion in bonuses bankers took home in 2008.
But that's just how much Jim Sinegal cares about seeing his business -- and its investors - flourish.
Here at Motley Fool we've crowned him "Most Foolish CEO." Frankly, we've long considered Sinegal's Costco Wholesale {Nasdaq: COST} one of the best-run companies around. Its stock hasn't always been cheap, but now that the market is at its lowest levels in almost a decade, Costco's shares are as much of a bargain as the stuff it sells.
And what Costco sells is big value. Each of the club warehouse retailer's 550 no-frills stores is as big as two and a half football fields with the end zones -- enabling each location to carry about 4,000 items. Many of those are in bulk. So if you need a 48-pack of toilet paper or 15 pounds of rib eye, Costco has you covered. Its wide variety of merchandise includes laundry detergent, tires, diamond rings, electronics, and tubs of trail mix big enough to sustain a Boy Scout camp for a week.
Sinegal keeps shelves stocked with big items carrying small price tags. Though this limits the profit he can make off merchandise, his primary focus is providing Costco's members with great value. And the company keeps things interesting for them by constantly stocking the shelves with new items, a concept Sinegal calls the "treasure hunt."
About 54 million people in 30 million households belong to Costco. And its membership base is a big part of its success. About 75% of Costco's operating income comes from the $50 annual household membership fee, which allows members to shop at any of Costco's stores or on its website.
And customers keep coming back for more. The renewal rate for membership is 87%, no doubt thanks to the company's refusal to substantially mark up merchandise. Costco is working on expanding its membership base and hopes to open about 475 more warehouses -- many in international markets, where value shoppers abound.
For some companies, new stores put a dent in the bottom line. Not so with Costco. With almost no exceptions, every store Sinegal and company open is immediately profitable. And each has a track record of becoming more profitable every year of operation. Take a look...
How is this possible?
Costco also has an exceptional cash conversion cycle. That's a little formula that measures, in days, how quickly a company can buy inventory, get it on the shelves, and sell it, thus converting it to cash. Costco turns over its entire inventory 12.8 times a year (more than once a month!) -- allowing it to sell merchandise even before it has to pay its suppliers for it.
This enables the company to buy some of its inventory on the vendors' payment terms instead of using its working capital. Costco's outstanding cash conversion cycle has run one to three days over the past few years. By comparison, a more traditional retailer like Macy's usually takes at least 70 days to convert its inventory to cash.
This business model produces significant free cash flow -- about $575 million in fiscal 2008. Costco also has a strong balance sheet, with $2.8 billion in cash and only $2.4 billion in debt.
The recent market slide-off took Costco's typically expensive price down to a level lower than we've seen in years. It's trading around $45 a share. Investors who snap up shares now will be greatly rewarded as the market wakes up to reality.
Our discounted cash flow calculations show the company could easily be worth $80 per share -- and that's our conservative estimate! Some of our scenarios showed the stock climbing to $102 and even $124 a share.
No matter how we run the numbers, Costco looks like it's worth double its current price. Now is time to make a Costco run!
"CHAMAILLAGE" au sujet de la vente au détail.
Vous le savez sûrement,c'est un domaine que j'aime bien !
La source de ce brassage d'idées viens d'un texte de FOOL.COM qui
annonce la mort " voir l'afflaibissement" de WALMART dans un horizon de 3 ans.
Le prochain "king" sera Costco Wholesale Corporation
------------------------------------------
The Death of Wal-Mart - The Real Cash King Changing the Face of Retail
For decades, American consumers were on an all-out shopping spree, fueling massive growth in the retail sector.
But now that run is over.
The deepening recession is forcing the nation's biggest retailers, like Macy's and J.C. Penney, to shutter up stores and halt their plans for expansion. And many others, like Circuit City and Linens n' Things, have declared bankruptcy.
This news may sound grim... but it doesn't mean Americans have stopped spending. In fact, there's a handful of retailers that are actually growing revenues and building new stores in this tough economy.
In particular, the "cash cow" Motley Fool bargain hunter and advisor Ron Gross calls "one of the best-run companies in the United States."
But it's not the company you might think it is...
When most people think of recession-proof stocks, retail giant Wal-Mart is usually the first that comes to mind. It's definitely a favorite of the financial media. Kiplinger's and Forbes both point out Wal-Mart's ability to hand investors steady gains throughout deep recessions.
In fact, while most stocks tanked in 2008, Wal-Mart's stock rose 16%! That's a heck of a return...
But be warned! Wal-Mart is NOT the best stock you can buy right now.
Because when the market rebounds and stocks are soaring left and right, you can be sure Wal-Mart won't be among the highflyers.
That's because it's one of the most widely held stocks in the world. It would have to pack on another $200 billion in market cap to double your investment -- a monumental feat, to be sure.
But imagine if you could invest in a business like Wal-Mart -- one that actually attracts more customers in tough economic times. And that cranks out cash no matter how bad things get...
Only imagine that this same business also has a little-known edge. An edge that hands it massive profits that could send its share price sky-high once the market wakes up...
The secret to finding a recession winner
Here's a hint: This "edge" is the same advantage that's allowed investors to make boatloads on Nike and Apple, two of America's most phenomenal growth stories.
And it's the reason GE shareholders were rewarded hand over fist as GE grew into the biggest company in the world.
In a word, it's leadership.
You see, guys like Phil Knight, Steve Jobs, and Jack Welch (not to mention the late Sam Walton) are the kind of focused, aggressive CEOs who can make shareholders rich.
That is, if you can spot them when the time is right. (It's not hard to do, but you have to know what you're looking for.)
Unfortunately, the market meltdown and recent corporate scandals have soured many investors on the idea of investing in old-fashioned values like leadership.
But that's good news for investors like us. Because while the rest of the investing world is ignoring this rock-solid company -- we can snap up shares on the cheap!
So let's dive in and find out what makes this company so special. And why it's a great fit for your portfolio.
Put customers first and success will follow
That's what drives the CEO of our top value company -- and as you'll realize, it's what has the stock price set to soar. With bulldog tenacity, he keeps prices low - making sure his customers come back time after time.
He's so focused on creating bargains, he never allows markups to exceed 14% on any product -- pressuring suppliers to sell for cheap. It's not easy, but "that's why they call it work," he says.
Call it what you will, but it almost guarantees healthy cash generation and consistent growth! In just 26 years it's become the fifth-largest retailer in the U.S.
In fact, this company brought in $71 billion in sales -- last year alone!
These kinds of results led to a No.1 "Specialty Retailer" ranking in Fortune magazine each of the last three years. Now, in 2009, it's the "22nd most admired company in the world."
You're probably familiar with this company and maybe even its CEO. You may even be among his stores' 54 million members. But you might not realize just how big the stock's upside is this very moment.
"The Best Bargain Is the CEO Himself"
That's how Smart Money described the founder and executive, whose base salary is just $350,000. Even with a $200,000 cash bonus, his half-million-dollar salary is shockingly low. Especially when you consider the $18 billion in bonuses bankers took home in 2008.
But that's just how much Jim Sinegal cares about seeing his business -- and its investors - flourish.
Here at Motley Fool we've crowned him "Most Foolish CEO." Frankly, we've long considered Sinegal's Costco Wholesale {Nasdaq: COST} one of the best-run companies around. Its stock hasn't always been cheap, but now that the market is at its lowest levels in almost a decade, Costco's shares are as much of a bargain as the stuff it sells.
And what Costco sells is big value. Each of the club warehouse retailer's 550 no-frills stores is as big as two and a half football fields with the end zones -- enabling each location to carry about 4,000 items. Many of those are in bulk. So if you need a 48-pack of toilet paper or 15 pounds of rib eye, Costco has you covered. Its wide variety of merchandise includes laundry detergent, tires, diamond rings, electronics, and tubs of trail mix big enough to sustain a Boy Scout camp for a week.
Sinegal keeps shelves stocked with big items carrying small price tags. Though this limits the profit he can make off merchandise, his primary focus is providing Costco's members with great value. And the company keeps things interesting for them by constantly stocking the shelves with new items, a concept Sinegal calls the "treasure hunt."
About 54 million people in 30 million households belong to Costco. And its membership base is a big part of its success. About 75% of Costco's operating income comes from the $50 annual household membership fee, which allows members to shop at any of Costco's stores or on its website.
And customers keep coming back for more. The renewal rate for membership is 87%, no doubt thanks to the company's refusal to substantially mark up merchandise. Costco is working on expanding its membership base and hopes to open about 475 more warehouses -- many in international markets, where value shoppers abound.
For some companies, new stores put a dent in the bottom line. Not so with Costco. With almost no exceptions, every store Sinegal and company open is immediately profitable. And each has a track record of becoming more profitable every year of operation. Take a look...
How is this possible?
Costco also has an exceptional cash conversion cycle. That's a little formula that measures, in days, how quickly a company can buy inventory, get it on the shelves, and sell it, thus converting it to cash. Costco turns over its entire inventory 12.8 times a year (more than once a month!) -- allowing it to sell merchandise even before it has to pay its suppliers for it.
This enables the company to buy some of its inventory on the vendors' payment terms instead of using its working capital. Costco's outstanding cash conversion cycle has run one to three days over the past few years. By comparison, a more traditional retailer like Macy's usually takes at least 70 days to convert its inventory to cash.
This business model produces significant free cash flow -- about $575 million in fiscal 2008. Costco also has a strong balance sheet, with $2.8 billion in cash and only $2.4 billion in debt.
The recent market slide-off took Costco's typically expensive price down to a level lower than we've seen in years. It's trading around $45 a share. Investors who snap up shares now will be greatly rewarded as the market wakes up to reality.
Our discounted cash flow calculations show the company could easily be worth $80 per share -- and that's our conservative estimate! Some of our scenarios showed the stock climbing to $102 and even $124 a share.
No matter how we run the numbers, Costco looks like it's worth double its current price. Now is time to make a Costco run!
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