Friday, April 20, 2007

Paperstand (WMT, SIR)

According to the WSJ’s ”Heard on the Street” column retail execs and major investors say Wal-Mart (WMT) needs to take some significant steps to regain its status as a growth stock. Here is their road map for rekindling the shares. Try the Golden Arches recipe. McDonald’s reversed a prolonged stock decline earlier this decade by drastically slowing US store expansion, closing unprofitable outlets and improving customer service. Between ‘03 and ‘05, its shares doubled in price. The key was McDonald's accepting that its US business had matured, and that it would be better off focusing more on overseas growth mkts, such as Latin America, Russia and China. Peter Sorrentino, of Huntington Asset Advisors, says it is time for a pullback in the US for the retailer. Wal-Mart has been "too focused on growth in units and not enough on the core business," Mr. Sorrentino says. "They lost their way."

Barron’s Online “Inside Scoop” section rerports that Steadfast Capital Mgmt disclosed that it now owns 4m shares of Sirva (SIR), or a 5.4% stake, up from the 2.1m shares it owned as of Dec.’06. According to, Steadfast "employs a value-oriented strategy and seeks to invest in co’s that are growing at 20-25% a year." The largest chunk of its portfolio, 16.4%, is invested in Berkshire Hathaway (BRKA).

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