Category: Sectors

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Technology Stocks

CSL Limited (ASX: CSL)

The Seqirus flu business, which achieved positive earnings (EBIT) for the first time in FY18, continues to perform strongly.
There is a lot of interest in their product line.
High entry barriers in terms of knowledge, worldwide channels, and operations/facilities/assets.
The executive team is strong, as are the operational capabilities.
Leveraged against a weakening dollar.
Key Risks
Pressures from competitors.
Behring’s core business, product recalls, disappoints.
Growth is underwhelming (underperform company guidance).
The Seqirus flu business is stalling or deteriorating.
Unfavourable currency fluctuations (AUD, EUR, USD).

FY21 Results Highlights
CSL’s influenza vaccines business, Seqirus, reported NPAT of $2,375 million, up 10%, and revenue of $10,026 million, up 10%, thanks to strong performance in leading subcutaneous Ig product HIZENTRA and leading HAE product HAEGARDA, as well as exceptionally strong performance in CSL’s influenza vaccines business. EBIT increased by 11% to $3,025, while margins remained at 30.2 percent. Earnings per share increased from 10% to $5.22.
The final payout of US$1.18 per share (A$1.61 franked at 10%) brings the total dividend for the year to US$2.22 per share, up 10%. Highlights from each segment: (1) CSL Behring, relative to the pcp and in constant currency. Albumin (+61%), HIZENTRA (+15%), HAEGARDA (+14%), and KCENTRA (+7%) all contributed to an increase in total revenue of 6%. (2) Seqirus is a character in the game Seqirus.
Seasonal influenza vaccine sales increased from 41% on a record volume of 130 million doses, driving total revenue up 30%. FLUAD® QIV was released in the United States in FY21, while FLUCELVAX was marketed in Australia.

Company Description
The Commonwealth Serum Laboratories Limited (CSL) is a company that develops, manufactures, and sells pharmaceutical and diagnostic products made from human plasma. Paediatrics and adult vaccines, infection, pain medicine, skin problem treatments, anti-venoms, anticoagulants, and immunoglobulins are among the company’s goods. These are life-saving products that are not optional.

General Advice Warning
Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Technology Stocks

Computershare Ltd (ASX: CPU)

  • Two main organic growth engines in mortgage servicing and employee share plans should lead to organic EPS growth.
  • Expectations of margin improvement via cost reductions program.
  • Leveraged to rising interest rates on client balances, corporate action and equity market activity.
  • Potential for earnings derived from non-share registry opportunities due to higher compliance and IT requirements.
  • Solid free cash flow and deleveraging balance sheet.

Key Risks

  • Increased competition from competitors such as recently listed Link and Equiniti which affect margins.
  • Cost cuts are not delivered in accordance with market expectations.
  • Sub-par performance in any of its segments, especially mortgage servicing (Business Services) as a result of higher regulatory and litigation risks; Register and Employee Share Plans as a result of subdued activity.
  • Exchanges such as ASX are exploring block chain solution to upgrade its clearing and settlement system (CHESS). This distributed ledger technology can bring registry businesses in-house and disrupt CPU.

FY21 results by segments

Compared to pcp and in CC(constant currency): Issuer Services delivered revenue growth of +9% to $975.1m, with Register Maintenance up +3.2% amid a recovery in shareholder paid fees, new client wins and increased market share, Corporate Actions up +35.3% with volumes increasing in all major regions as a result of clients raising capital, improved IPO markets, especially in Hong Kong, and strong M&A activity, Stakeholder Relationship Management up +45.7%, Governance Service up +90.7% and Margin income down -44.3%. Management EBITDA gained +5.1% to $273.9m (with margin down -100bps to 28.1%), however, Management EBIT ex Margin Income was up +26.3% to $227.1m with margin expansion of +240bps to 24.4%, with management anticipating organic revenue ex MI growth of 0-3% p.a. and EBIT ex MI growth of 0-5% p.a. in medium term. Employee Share Plans saw revenue increase +6.3% to $308.5m, driven by Fee revenue (+4%), Transactional revenue (+15.8%) as equity markets rallied and units under administration grew +13% over pcp to $27bn as more companies issued equity deeper into their organisations, Margin Income (-4.8%) and Other revenue (-64.3%). Management EBITDA of $78.1m was up +40% (margins up +610bps to 25.3%), with Management EBIT ex MI of $69m up +68.3% (margins up +790bps to 22.6%), with management anticipating revenue ex MI growth of +3-6% p.a. and EBIT ex MI growth of +4-8% p.a. in medium term.  Mortgage Services saw revenue fall -9.5% to $574.8m driven by UK Mortgage Services (-36.6%) and Margin income (-84.7%), partially offset by US Mortgage Services (+7.7%). Management EBITDA of $103.3m was down -18.9% (margins down -200bps to 18%), with Management EBIT ex Margin Income a loss of $4.2m, with management expecting recovery in FY22 anticipating revenue ex MI and EBIT ex MI growth of 5-10% p.a. in medium term. Business Services delivered revenue decline of -15% to $207.1m, driven by Corporate Trust (-0.5%), Class Action (-30.6%) and Margin income (-48.8%), partially offset by Bankruptcy (+36.6%), Management EBITDA of $51m was down -42.2% (margins down -1160bps to 24.6%) and Management EBIT ex Margin loss of $20.4m decreased -34.4% with margin decline of -510bps to 11.5%, however, management anticipating revenue ex MI growth of 3-5% and EBIT ex MI growth of 2-5% in medium term.

Company Description  

Computershare Ltd (CPU) is a global market leader in transfer agency and share registration, employee equity plans, mortgage servicing, proxy solicitation and stakeholder communications. CPU also operates in corporate trust, bankruptcy, class action and a range of other diversified financial and governance services. 

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Funds Funds

Fidelity Asia Fund

and draws on the research capabilities of Fidelity’s analysts based on the ground in Asia.The Fund aims to achieve returns in excess of the MSCI AC Asia ex-Japan Index NR over the suggested minimum investment time period of five to seven years.

Our Opinion

Our rating is based on the following key drivers:

Capable PM/team:

The Fund’s star portfolio manager, Anthony Srom, and his supporting cast of analysts in high regard. Mr. Srom is well-supported by 50 on-the-groundanalysts in Asia and Fidelity’s global researchteam of 180 analysts and 400 investmentprofessionals worldwide. This makes the team one of the largest buyside firms. Nevertheless, we question the extent at which ongoing and deep research can be maintained in order to beat the index –in our view, it is increasingly difficult no matter how large an investment team is,to beat a benchmark of an efficient, liquid and well researched market.

Well-resourced and access to Company management

Relative to peers, the investment team is well resourced with additional access to third party research and consultants to conduct deep investment research as well as a thorough company visitation schedule (as a result of the investment firm’s reputation). Fidelity conducts more than 15,000company meetings a year, in order togain better insights andknowledge, to make investment decisions.

Sensible investment process rooted in bottom-up research, high conviction, highly concentrated and low turnover

The Fund conducts fundamentals bottom-up stock selection to build a high conviction and highly concentrated portfolio of 20–35 stocks based in the Asia Pacific ex Japan region. There is no deliberate portfolio management style bias, although new positions typically exhibit a contrarian/value bias. Mr. Srom is willing to take a long-term view on a stock, resulting in a low turnover strategy (40%–70%). This translates to a holding period of 18–24 months, but there are stocks that have been held for more than three years.

Downside Risk

Asian economic conditions deteriorate, leading to earnings downgrades at the company level. High quality companies underperform especially in stocks where the Fund has a relative overweight position.
Key-man risk should Portfolio Manager, Mr. Anthony Sromdepart.
The Fund invests in emerging markets which can be more volatile than other more developed markets.
The Fund invests in a relatively small number of companies and so may carry more risk than fundsthat are more diversified.

(Source: Morningstar)
General Advice Warning
Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Technology Stocks

Megaport Ltd (ASX: MP1)

  • to the rapidly growth of global cloud and data centres and is in a strong position to benefit from the rollout to new cloud and data centre regions. Key macro tailwinds behind MP1’s sector: (1) adoption of cloud by new enterprises; (2) increased level of investment and expenditure by existing customers; and (3) more and more enterprises looking to use multiple cloud products/providers, which works well with MP1’s business model.
  • MP1 has a scale advantage over competitors. MP1 is over 600 locations around the globe. MP1 has significant scale advantage over competitors and whilst replicating this scale is not necessarily the difficult task, it will take a number of years to do so during which time MP1 will continue to add locations and customers using the scale advantage.
  • Strong R&D program ensuring MP1 remains ahead of competitors
  • Strong cash balance of $136.3m at year end and a reducing cash burn profile puts the Company in a strong position.
  • Strong relationship with data centres (DC). MP1 has equipment installed in 400 data centres, so MP1 is a customer of data centres. MP1 also drives DCs interconnection revenue. Whilst several data centres like NEXTDC, Equinix provide SDN (Software Defined Network) services, it is unlikely data centres will look to change their relationship with (or restrict) MP1 given they are designed to be neutral providers to network operators. Further, given MP1’s existing customer base and connections with cloud service providers, it would be very difficult for data centres (without significant disruption to customers/cloud service providers) to change the rules for MP1.

      Key Risks

  • High level of execution risk (especially with respect to development).
  • Revenue, cost and product synergies fail to eventuate from the InnovoEdge acquisition.
  • Heavy reliance on third party partners (especially data centre providers and cloud service providers).
  • Data centres like NEXTDC, Equinix provide SDN services and decide to restrict MP1 in providing their services.
  • Disappointing growth (in terms of expanding data centre footprint, customers, ports, Megaport Cloud Router).

FY21 Results Highlights

Relative to the pcp: (1) Revenue of $78.28m, up +35%. EBITDA breakeven. Net loss for FY21 was $55.0m. (2) MRR of $7.5m, was an increase of $1.8m, or +32% (annualises to $90m). (3) Customers grew to 2,285, or up 443 or +24%. (4) Installed Data Centres increased by 39, or +11% to 405. (5) Enabled Data Centres increased by 92, or +14% to 761. (6) Ports increased 1,922, or 33% to 7,689. (7) Average revenue per port was down $2 to $978. (8) At year-end, MP1’s cash position was $136.

Company Description 

Megaport Ltd (MP1) is a software-based elastic connectivity provider – that is, it is a global Network as a Service (NaaS) provider. MP1 develops an elastic connectivity platform providing customers interconnectivity and flexibility between other networks and cloud providers connected to the platform.

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Technology Stocks

JB Hi-Fi Ltd (ASX: JPH) Updates

  • Being a low-cost retailer and able to provide low prices to consumers (JB Hi-Fi & The Good Guys) puts the Company in a good position to compete against rivals (e.g. Amazon). 
  • The acquisition of The Good Guys gives JBH exposure to the bulky goods market.
  • Market leading positions in key customer categories means suppliers ensure their products are available through the JBH network.  
  • Clear value proposition and market positioning (recognized as the value brand). 
  • Growing online sales channel. 
  • Solid management team – new CEO Terry Smart was previously the CEO of JBH (and did a great job and is well regarded) hence we are less concerned about the change in senior management. 

Key Risks

  • Increase in competitive pressures (reported entry of Amazon into the Australian market). 
  • Roll-back of Covid-19 induced sales will likely see the stock de-rate. 
  • Increase in cost of doing business. 
  • Lack of new product releases to drive top line growth.
  • Store roll-out strategy stalls or new stores cannibalize existing stores. 
  • Execution risk – integration risk and synergy benefits from The Good Guys acquisition falling short of targets). 

FY21 group Summary

Group sales were up +12.6% to $8.9bn, consisting of JB Hi-Fi Australia up +12.0%, JB Hi-Fi NZ up +17.4% (NZD) and The Good Guys up +13.7%. The Company saw strong demand for consumer electronics and home appliances during the period. Operating earnings (EBIT) followed strong top line growth, with group EBIT up +53.8% to $743m – driven by JB Hi-Fi Australia up +33.6% and The Good Guys up +90.2%. Group EBIT margin expanded +233bps to 8.33%, highlighting the strong operating leverage in the business. The Company declared a final dividend of 107cps (up +18.9% YoY), taking the full year dividend to 287cps (up +51.9% YoY).

Company Description  

JB Hi-Fi Ltd (JBH) is a home appliances and consumer electronics retailer in Australia and New Zealand. JBH’s products include consumer electronics (TVs, audio, computers), software (CDs, DVDs, Blu-ray discs and games), home appliances (white goods, cooking products & small appliances), telecommunications products and services, musical instruments, and digital video content. JBH holds significant market-share in many of its product categories. The Group’s sales are primarily from its branded retail store network (JB Hi-Fi stores and JB Hi-Fi Home stores) and online.

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Technology Stocks

Carsales.com Ltd (ASX: CAR)

  • Heavily reliant on two growth stories (South Korea and Brazil).
  • Diversified geographic coverage.
  • Bolt-on acquisitions provide opportunity to supplement organic growth.
  • The Company can sustain high single-digit and low double-digit revenue growth. 
  • CAR’s move into adjacent products and industries. 
  • Increasing pricing in South Korea to boost margins.
  • Looking to take more of the car buying experience online with dealers (i.e. increasing its total addressable market).

Key Risks

 We see the following key risks to our investment thesis:

  • Rich and demanding valuation.
  • Competitive pressures, that is car dealer driven substitute platform or the No. 2 & 3 player gain ground on CAR.
  • Motor vehicle sales remain subdued.  
  • Value destructive acquisition / execution risk with international strategy.
  • Not immune from broader downturn in economy (consumer likely to delay a significant purchase in time of uncertainty).

FY22 Earnings Guidance:- 

CAR provided no quantitative guidance but provided outlook commentary (which excluded the impact of acquiring Trader Interactive). 

  • Consolidated Outlook: “in FY21… While current lockdowns and retail closures are having an impact on leads and private ad volumes, if our experience is consistent with prior lockdowns, the business is well placed to recover all or most of the declines once retail re-opens. On this basis we would expect to deliver solid growth in Group Adjusted revenue, Adjusted EBITDA and Adjusted NPAT1 in FY22. Depending on the duration and frequency of lockdowns in the first half, financial performance is likely to be more heavily weighted to the second half than usual”. 
  • Australia. Dealer: “Outside the states impacted by lockdowns, underlying market conditions remain solid”. Private: “Private listing volumes are growing strongly on pcp excluding NSW; tyresales has operated at lower volume levels in July 2021 due to the lockdowns in NSW and Victoria”. Media and new car market: “The new car market continues to demonstrate signs of improvement as evidenced by the solid performance in new car sales volumes over the last six months. This has resulted in an improvement in media revenue run rate, providing confidence that we can deliver growth in this segment in FY22”. Domestic Core expenses: “Anticipating core expenses to be higher in FY22 compared to FY21 largely reflecting the absence of wage subsidies”. 
  • International. (i) Korea: “In FY22 we expect strong growth in revenue and strong growth in EBITDA excluding the potential for continued marketing investment in Dealer Direct”. (ii) Brazil: “We expect strong growth in revenue and EBITDA in FY22”. (iii) U.S: “In July 2021, financial performance continues to be strong. We will provide guidance on Trader Interactive at the AGM in October-21”.

Company Description  

Carsales.com Ltd (ASX:CAR), founded in 1997, operates the largest online automotive, motorcycle and marine classifieds business in Australia. Carsales is regarded as one of Australia’s original disruptors and has expanded to include a large number of market-leading brands. The Company employs over 800 and develops world leading technology and advertising solutions in Melbourne. CAR has also expanded to numerous global markets, such as South Korea, Brazil, and other countries in Latin America.

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Global stocks Shares

Baby Bunting Group (ASX: BBN)

  • BBN has the largest presence in Australia amongst specialty baby goods retailers.
  • Low risk that online sales threaten high service business model of brick-and- mortar stores to showcase goods and in-store advice.
  • Solid growth story via new store openings (targeting 100+ stores network).
  • Strong market shares (currently sits at 30% in a highly fragmented market).
  • NZ’s $450m addressable market represents another opportunity.

Key Risks

  • Retail environment and general economic conditions in addressable markets may deteriorate.
  • Competition may intensify especially from online retailers such as Amazon, specialty retailers, department stores, and discounted department stores.
  • Customer buying habits/trends may change. Rapid changes in customer buying habits and preferences may make it difficult for the Company to keep up with and respond to customer demands.
  • Higher operating and occupancy costs. Any increase in operating costs especially labour costs will affect the Company’s profitability.
  • Poor inventory control and product sourcing may be disrupted.
  • Management performance risks such as poor execution of store rollout especially into ex-metro areas.

FY21 result highlights

Sales of $468.4m were up +15.6%, with same-store comparable sales up +11.3%. Online sales grew by +54.2% and now make up 19.4% of total sales (vs. 14.5% in PCP). Gross profit of $173.7m was up +18.3% on PCP, with GP margin up +83bps to 37.1%. Cost of doing business (CODB) as a percentage of sales improved 14bps to 27.8%, aided by store expense leverage and warehouse volume leverage (cost fractionalization). Operating earnings (EBITDA) were up +29.2% to $43.5m (with EBITDA margin up +100bps to 9.3%) and NPAT was up +34.8% to $26.0m.Operating cash flow was weaker versus pcp, driven by higher working capital – driven by an increase in inventories and also cycling particularly low levels in the pcp. 

 The Company declared a final dividend of 8.3cps, taking the full year dividend to 14.1cps (up +34.1% on PCP). The Board continues to target a payout ratio in the range of 70-100% pro forma NPAT. Private label sales were up +31.1% vs pcp and now make up 41.4% of group sales (vs. 36.5% in FY20). The Company remains on target to achieve 50%of sales from private sales. Outlook guidance: Similar to last year, no earnings guidance was provided for FY22 due to Covid-19 related uncertainty. However, year-to-date trading update suggest the Company is feeling the impacts of the current lockdowns – comparable store sales are down -6.4% YTD (impacted by stay at home orders), online sales are up a healthy +32.6% however much lower than pcp and excluding the most impacted state (NSW) comparable sales are up a subdued +1.0%.

Company Description

Baby Bunting Group Limited (BBN) is Australia’s largest nursery retailer and one- stop-baby shop with 42 stores across Australia. The company is a specialist retailer catering to parents with children from newborn to 3 years of age. Products include Prams, Car Seats, Carriers, Furniture, Nursery, and Safety, Baby wear, Manchester, Changing, Toys, Feeding and others.

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Global stocks Shares

Applied Materials Inc poised for Remarkable Growth in Fiscal 2021

 It has been observed that Applied Materials and its peers have all called for strong growth in 2021, driven by record capital expenditure levels at TSMC (Taiwan Semiconductor Manufacturing Company) and Intel as well as solid memory spending.

Third-quarter sales rose 41% year over year to $6.2 billion, led by a 53% increase in the semiconductor systems group (SSG) revenue. Within SSG, equipment sales to logic and foundry customers grew 75% year over year. This strength has been attributed to investments supporting leading-edge process technologies at the likes of TSMC as well as lagging-edge processes that support end markets such as automotive and Internet of Things. Memory equipment sales also grew 26% year over year. Foundry and logic are expected to be the biggest growth drivers for Applied’s SSG sales in 2021.

Financial Strength:

The last price for Applied Materials Inc. was USD 129.20, whereas its fair value has been estimated to be USD 131. Besides, PE ratio of Applied during 2020 was 14.2, making it undervalued with reference to its sector. This suggests that there is room for growth of the Applied Materials Inc. 

Management expects Applied’s fourth-quarter revenue to be up by 34% year over year at the midpoint, with momentum persisting into 2022. Also, the sales of Applied are expected to be $6.3 billion at the midpoint, with SSG at $4.6 billion, services at $1.3 billion, and display at $400 million.

Quarterly services revenue was nearly $1.3 billion and was up 24% year over year. In recent years, services and part sales from long-term service agreements have grown from 40% to 87% of total service revenue. 

Company Profile:

Applied Materials is one of the world’s largest suppliers of semiconductor manufacturing equipment, providing materials engineering solutions to help make nearly every chip in the world. The firm’s systems are used in nearly every major process step with the exception of lithography. Key tools include those for chemical and physical vapor deposition, etching, chemical mechanical polishing, wafer- and reticle-inspection, critical dimension measurement, and defect-inspection scanning electron microscopes.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Global stocks

Increase in Winnebago Industries’ dividend by 50%

 customized specialty vehicles, and parts and services. Winnebago Industries’ strong brand equity in recreational vehicles and its balance sheet would allow the firm to persevere through economic turmoil. 

The top three motor home manufacturers (Thor, Forest River, and Winnebago) make up about 80% of the North American motor home market. Winnebago has reinvented itself under CEO Mike Happe with the November 2016 acquisition of high-end towable maker Grand Design and sees itself as a leading outdoor lifestyle firm rather than just a maker of RVs. Acquisitions in the $700 billion-plus outdoor activity market also play a role. Over 60% of U.S. households’ camp at least occasionally and 12% camp more than three times a year. Millennial and Gen X campers are 81% of new U.S. campers, and 82% of new campers since the pandemic have children, so Winnebago has plenty of runway with younger consumers if it executes right.

Financial Strength:

The balance sheet lacks the massive legacy costs that burden some other manufacturers because Winnebago’s workforce is not unionized. Winnebago’s untapped $192.5 million credit line coupled with $405.8 million of cash at the end of the third quarter of fiscal 2021 would get the firm through nearly any challenge. 

A 9% increase in the dividend in summer 2020, despite the pandemic at the time, is a good sign of financial health, as is a 50% increase announced in August 2021.Winnebago’s balance sheet had been free of long-term debt since the mid-1990s. Net debt/adjusted EBITDA was 1.7 times at the end of fiscal 2020. Winnebago has no significant pension obligations and stopped paying retiree healthcare in 2017. Revenue was about $2.35 billion in fiscal 2020.

Bulls Say:

The Grand Design acquisition materially raised Winnebago’s operating margin, and Newmar could do

the same.

The company’s strong balance sheet provides financial strength and flexibility to withstand cyclical downturns.

Because RV consumers are relatively affluent, rising gas prices would probably not hinder a consumer’s ability to purchase a motor home. A 2016 study by travel consulting firm PKF Consulting found that for a family of four, gas prices would have to exceed $12 a gallon to make RV travel more expensive than other forms of travel.

Company Profile:

Winnebago Industries manufactures Class A, B, and C motor homes along with towables, customized specialty vehicles, and parts and services. With headquarters in Eden Prairie, Minnesota, Winnebago has been producing recreational vehicles since 1958. Class A motor homes account for 31% of motorized unit sales, Class B about 41%, and Class C the rest.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Technology Stocks

Walmart’s Second Quarter Suggests Continued Strength Despite Normalization

 to last year’s pandemic-sparked sales surge (5.2% comparable growth for U.S. namesake stores, 14.5% two-year stack). While Walmart beat our expectations, we attribute the outperformance to pandemic-related volatility, so our long-term targets of lowsingle- digit percentage top-line growth and mid-single-digit adjusted operating margins are intact. The top-line outperformance extended across Walmart’s segments (5.2% and 7.7% comparable growth, excluding fuel, at Walmart U.S. and Sam’s Club, versus our respective 2.6% and 4.3% forecasts, and $23.0 billion in international revenue against our $22.3 billion mark). 

Recovery in pandemic-affected categories like auto care and party augmented another strong quarter in grocery, where Walmart gained share domestically on mid-single-digit comparable growth. Cost leverage contributed to a 5.3% adjusted operating margin, up nearly 80 basis points. Management lifted full-year guidance, now calling for $6.20 to $6.35 in adjusted diluted EPS, up from around $6.03 (which was near our prior estimate, which should rise toward the top of the new range).

Walmart’s advertising business (Walmart Connect) was particularly strong, with U.S. sales nearly doubling and the

number of active advertisers up more than 170%. Although e-commerce sales consolidated gains (up 6% in the U.S. for the quarter, and 103% on a two-year stacked basis), we believe Walmart is still in the earlier stages of capitalizing on its ancillary online revenue potential

Company Profile 

America’s largest retailer by sales, Walmart operated over 11,400 stores under 54 banners at the end of fiscal 2021, selling a variety of general merchandise and grocery items. Its home market accounted for 78% of sales in fiscal 2021, with Mexico and Central America (6%) and Canada (4%) its largest external markets. In the United States, around 56% of sales come from grocery, 32% from general merchandise, and 10% from health and wellness items. The company operates several e-commerce properties apart from its eponymous site, including Flipkart and shoes.com (it also owns a roughly 10% stake in Chinese online retailer JD.com). Combined, e-commerce accounted for about 12% of fiscal 2021 sales.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.