<THE FOOLISH FOUR>

Wal-Mart's Earnings
by Robert Sheard

LEXINGTON, KY. (August 11, 1998) -- Foolish Four stocks were universally whacked today as the general market took another dip, but in the absence of any company-specific reasons for the sell-off, let me focus today on some good news, for one Dow component anyway -- Wal-Mart's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WMT)") else Response.Write("(NYSE: WMT)") end if %> better-than-expected earnings report.

Earnings jumped 30% year-over-year as profits from international stores surged. Net income came in at $1.03 billion, or 46 cents a share, compared to 35 cents a share last year. Analysts expected 43 cents a share.

What's more, Wal-Mart expects international sales to keep pushing ahead, growing by roughly 40% this year.

Wal-Mart is the third big retailer to beat analysts' expectations this quarter, profiting on the strength of the U.S. economy, low inflation, and high consumer confidence. And despite today's triple-digit drop for the Dow, Wal-Mart scored a gain of a buck a share.

In the past year (through August 5), Wal-Mart's stock has risen 69% compared to a 19% gain for the Standard & Poor's 500 Index. But if you're strictly a Dow high-yield investor, this is one you'd have overlooked; Wal-Mart has the lowest dividend yield of the thirty Dow components. It just goes to show that there are more ways than one to build outperforming portfolios. A growth stock like Wal-Mart or Coca-Cola <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KO)") else Response.Write("(NYSE: KO)") end if %> may never show up among the high yielders, despite the strategy's long-term success. Yet these two stocks and others like them have been terrific investments in the past.

Build your core holdings around the Dow Dividend Approach, then start looking to add terrific growth stocks to diversify your portfolio into 12-20 holdings. Some "obviously great companies" and these simple approaches will take you through the whole season.

Current Dow Order | 1998 Dow Returns

[Robert Sheard is the author of the The Unemotional Investor (Simon & Schuster, 1998) available now at Amazon.com and your local bookseller.]

08/11/98 Close
Stock  Change   Last 
 -------------------- 
 UK   -   1/4   46.94 
 IP   -1  3/8   42.63 
 MO   -   7/8   41.88 
 EK   -1  3/8   82.50 
  
 
 
                    Day   Month    Year 
         FOOL-4   -1.77%  -2.99%  10.57% 
         DJIA     -1.31%  -4.73%   7.01% 
         S&P 500  -1.31%  -4.61%  10.16% 
         NASDAQ   -2.53%  -4.26%  14.16% 
  
     Rec'd   #  Security     In At       Now    Change 
  
  12/31/97  206 Eastman Ko    60.56     82.50    36.22% 
  12/31/97  291 Union Carb    42.94     46.94     9.32% 
  12/31/97  289 Int'l Pape    43.13     42.63    -1.16% 
  12/31/97  276 Philip Mor    45.25     41.88    -7.46% 
  
  
     Rec'd   #  Security     In At     Value    Change 
  
  12/31/97  206 Eastman Ko 12475.88  16995.00  $4519.13 
  12/31/97  291 Union Carb 12494.81  13658.81  $1164.00 
  12/31/97  289 Int'l Pape 12463.13  12318.63  -$144.50 
  12/31/97  276 Philip Mor 12489.00  11557.50  -$931.50 
  
  
                              CASH    $754.73 
                             TOTAL  $55284.67