Walmart Inc. (WMT): Is This Insider Trading a Scary Sign?

After opening Tuesday at around $95.99, Walmart Inc. (NYSE:WMT) stock surged to as high as $96.52. It then made a downturn, dipping as low as $94.99. Although the stock bounced a bit into the close, it finished the day at $95.1, up 0.18 points or 0.19 percent on the day. The final volume for the day was 6.148 million, which was less than its average volume. The firm is left with a market cap of $278 billion and now has 2.92 billion shares outstanding. Walmart Inc. (WMT) stock has gained 0.16 percent of market value in 21 trading days.

WMT stock has a trailing 3-year beta of 0.52, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $1.67 a share in the trailing twelve months. The stock’s value has fallen -3.7 percent year to date (YTD) against a rise of 20.15 percent in 12 month’s time. The company’s shares still trade -13.53 percent away from its 1-year high of $109.98 and 22.71 percent up from 52-week low of $77.50. The average consensus rating on the company is 2.4, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Walmart Inc. (WMT) will probably climb 9.24 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $115-month high price target. This represents a whopping 20.93 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $102, which represents a return potential of 7.26 percent when compared to the closing price of the stock of $95.1 on Tuesday, September 25. The lowest price target for the stock is $89 — slightly more than -6.41 percent from WMT’s current share price.

History has shown that shares in Walmart Inc. have gone down on 19 different earnings reaction days and are predicted to add 0.03 percent when the company reports upcoming earnings.

Let’s take a look at some insider activity at Walmart Inc. (NYSE:WMT) and see the pattern. The earliest insider trade took place on 09/18/2018. Walton S Robson parted with a total of 600 thousand shares of company at average share price of $95.37. The total for the sales was set at $57.22 million. After this transaction, the Director, 10% Owner account balance stood at 1480 million shares. The stock lost -0.28 percent since that insider sale. On 09/18/2018, Walton Jim C, 10% Owner, sold 600 thousand shares at a price per share of $95.37. This removed 57.22 million shares from the insider’s fortune and the stock saw a -0.28 percent retreat in value since the news became public. This transaction left 1480 million shares in the 10% Owner account.

On 09/18/2018, 10% Owner Walton Alice L performed a sale transaction worth $57.22 million. This sale at $95.37 each has eliminated 600 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -0.28 percent decrease since the transaction was reported. The insider now is left with 1480 million shares remaining in the account. Walton S Robson, who performs the Director, 10% Owner job, sold 531.36 thousand shares for $50.6 million. The disposal occurred on 09/13/2018 was priced at $95.23 per share. The share price plunged -0.14 percent since the reporting date. Walton S Robson now left with a stake of 1480 million WMT stock worth $140748 million after the insider selling.

The stock is currently hovering around the first support level of $94.55. Below this, the next support is placed in the zone of $94.01. Till the time, the WMT stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 52.6 on daily chart, which may remain a cause for concern. If the price breaks below $94.01 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $96.08 mark may result into a pull-back move towards $97.07 level.

Shares of Walmart Inc. (WMT) are trading at a P/E ratio of 56.9 times earnings reported for the past 12 months. The industry WMT operates in has an average P/E of 72.33. Its P/E ratio went as low as 14.53X and as high as 33.21 over the 5-year span.Further, it is sporting a 0.55 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.45. 25.2 percent is the gross profit margin for Walmart Inc. and operating margin sits at 3.5 percent. Along with this, the net profit margin is 1 percent.