had some improvement last quarter, but the stock gets a D in our stock grader and the fundamentals are also a D. That’s pretty bad. It means the stock is struggling, and if it falls to an F, it will be in even worse shape. I think Hormel needs to have a better story than Spam. That’s my personal opinion. Packaged food is still a big deal and they have a lot of good brands, but they would need a big surprise to get my attention. Right now, it’s off my radar.
was recently placed on a list of Chinese companies that deal with the military, and that caused reputational pressure in the U.S., which is why the stock has been hit. Alibaba is a very good company with incredible market share. I’ve never owned it because it does not have the operating margins I demand. Fundamentally, it is rated a D right now, which is weak. I don’t like seeing margins under compression. The recent weakness is tied to being named among companies with alleged Chinese military ties. When sectors are targeted, ETFs often sell across the board, and even strong stocks get punished. We’ve seen entire sectors get sold off broadly even when the narrative does not fully apply. Alibaba has been hit because of those concerns, but I think it could regroup. However, I would need to see operating margins improve before considering it.
is an interesting company. Many foreign workers in the U.S. use it to send money home. Even though some workers have left, many remain. The key will be guidance. The company now faces competition from blockchain-based transfers and other digital payment apps like Zelle. I want to see how deportations and policy changes may have affected cross-border volumes, along with growing competition from blockchain and alternative transfer methods. If blockchain proves to be a cheaper and more efficient way to send money, that could hurt Western Union. They may eventually have to lower fees to remain competitive. For now, I am watching their guidance closely.
operates like five stores in one. We hold it under management. It is not our highest-ranked stock — it is B-rated — so it is currently a hold. However, it is very well managed. Each division is treated as a profit center. Walmart’s biggest success has been groceries. It is the largest grocery retailer in America, and grocery strength has helped raise the median income of its shoppers. I want to see strong same-store sales growth and solid guidance. Value-oriented retailers such as Costco, BJ’s Wholesale, and Walmart have been performing relatively well. As long as same-store sales remain strong, I would be pleased with the results.