Should you exit your Chevron Corp (USA Stocks:CVX) and Walmart (USA Stocks:WMT) positions after an advance?

WMT Stock  USD 145.25  1.64  1.14%   
As many rational traders are trying to avoid food & staples retailing space, it makes sense to review Walmart a little further and understand how it stands against Chevron Corp and other similar entities. We are going to break down some of the competitive aspects of both Walmart and Chevron.
Published over a month ago
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Reviewed by Raphi Shpitalnik

By analyzing existing primary indicators between Walmart and Chevron, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Chevron with a short position in Walmart. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Walmart has an asset utilization ratio of 233.91 percent. This implies that the company is making $2.34 for each dollar of assets. An increasing asset utilization means that Walmart is more efficient with each dollar of assets it utilizes for everyday operations.

How important is Walmart's Liquidity

Walmart financial leverage refers to using borrowed capital as a funding source to finance Walmart ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Walmart financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Walmart's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Walmart, but it might be worth checking our own buy vs. sell analysis

Breaking it down

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Let me now analyze Walmart revenue. Based on the latest financial disclosure, Walmart reported 572.75 B of revenue. This is much higher than that of the Food & Staples Retailing sector and significantly higher than that of the Consumer Staples industry. The revenue for all United States stocks is significantly lower than that of Walmart. As for Chevron Corp we see revenue of 235.72 B, which is 165.08% higher than that of the Consumer Staples

Walmart572.75 Billion
Sector9.43 Billion
Chevron235.72 Billion
572.8 B
235.7 B

Walmart showing indication of lower volatility

The market risk adjusted performance is down to 0.12 as of today. Walmart has relatively low volatility with skewness of 1.72 and kurtosis of 8.25. However, we advise all investors to independently investigate Walmart to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Walmart's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Walmart's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Final Takeaway

When is the right time to buy or sell Walmart? Buying stocks such as Walmart isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily basis.
All things considered, as of the 20th of February 2023, we believe Walmart is currently overvalued. It moves indifferently to market moves and projects very low probability of bankruptcy in the next two years. However, our overall 90 days buy-sell recommendation on the firm is Strong Buy.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Walmart. Please refer to our Terms of Use for any information regarding our disclosure principles.

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