Caxton Associates initiates a new position in Walmart


Mar. 4 2015, Updated 5:05 p.m. ET

Caxton’s holdings in Walmart

Caxton Associates initiated a new position in Walmart (WMT) that amounts to 1,385,200 shares of the company, constituting 9.2% of the fund’s 4Q14 portfolio. Walmart has a 7.8% representation in the holdings of the Consumer Staples Select Sector SPDR Fund (XLP).

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An overview of Walmart

Walmart operates retail stores and membership clubs. The company offers a range of services and merchandise at “everyday low prices” via three major business segments: Walmart US, Walmart International, and Sam’s Club. Walmart operates more than 11,000 retail units across more than 25 countries under 71 banners. The company also operates e-commerce sites in more than 10 countries.

Walmart believes that both supercenter and neighborhood market formats offer valuable fill-in opportunities. The combination of formats would enable Walmart to effectively compete with other retailers such as Safeway (SWY), Dollar General (DG), and Target (TGT). The VanEck Vectors Retail ETF (RTH) has a 4.3% weight in Target and a 2.7% weight in Dollar General. The SPDR S&P Retail ETF (XRT) has a 0.97% stake in Safeway.

4Q14 financial performance is in line with expectations

Walmart’s revenues increased 1.4% to $141.6 billion in the quarter ending January 30, 2015. Comparable sales, which represent sales in stores that have been open for at least a year, rose by 1.5% during 4Q14, which included the holiday season.

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Walmart’s expansion plans in Canada

The company announced that it had plans for completing close to 30 supercenter projects by the end of the current fiscal year. In addition, the company announced plans to expand its distribution network to support its e-commerce and food segment growth within Canada. Walmart expects capital spending of 340 million Canadian dollars for e-commerce, distribution networks, and supercenter projects in Canada.

Walmart is well-positioned to capitalize on mobile commerce trends

E-commerce is witnessing tremendous growth in terms of transactions made from mobile devices. As per Walmart’s recent corporate presentation, close to 70% of the traffic on walmart.com during the recent holiday period originated from mobile devices. Customers who were previously using laptops are presently using tablets and phones for carrying out their shopping at Walmart and the company is well-positioned to create a strong mobile shopping experience for customers.

In the next part of this series, we’ll look at Caxton’s new stake in General Motors.


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