Why Warren Buffett Still Believes in Wal-Mart Stores, Inc.

If there's one big company that's been in the crosshairs of both social activists and disappointed shareholders lately, it's Wal-Mart . Though shares of the company are up a healthy 50% since late 2011, there's been trouble brewing on multiple fronts.

It's no secret that there are lots of folks out there who question how well Wal-Mart treats its everyday employees. Some might say as shareholders, the only thing investors should worry about is the company's financial performance. But even that is coming under scrutiny.

As my Foolish colleague Travis Hoium recently pointed out, the company's same-store sales domestically are falling, and margins are shrinking abroad. And all of this is happening at a time when the retail sector is actually growing.


These trends, however, haven't stopped the world's greatest investor, Warren Buffett, from gobbling up more shares of Wal-Mart. When Buffett's Berkshire Hathaway  released its 13-F filings recently, it showed that Berkshire's stake in Wal-Mart had increased by 17% with the purchase of 8.6 million Wal-Mart shares.

Berkshire's partial ownership of Wal-Mart dates back years, with the position growing large enough to garner recognition back in late 2005. Since then, Wal-Mart has grown to be Berkshire's fifth largest investment holding -- valued at roughly $4.4 billion.

So why does Buffett still believe in Wal-Mart when others don't? Check out the following slideshow to find out.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

The article Why Warren Buffett Still Believes in Wal-Mart Stores, Inc. originally appeared on Fool.com.

Brian Stoffel owns shares of Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Understanding Stock Market Indexes

What does it mean when people say "the market is up 2%"?

View Course »

What Is Your Risk Tolerance?

Answer the question "What type of investor am I?".

View Course »

Add a Comment

*0 / 3000 Character Maximum