I subscribe to an investment advisory service called “Seeking Alpha“.  I do so because I learned about the markets from my father when I was growing up and I’ve always enjoyed learning about how companies sell their products and build their profits.  Knowing how a company operates helps me in making my decision to invest or not.  To me, building profits is a pretty simple formula — “Enhance your revenues and contain your costs”.

Every business or non-profit that I’ve been involved in that simple formula has worked.  And, there are all kinds of ways to do so. . . . . In the funeral home business, raising your rates will enhance revenues as will buying another funeral home.  However, the profits multiply if you can raise revenue at the same time you contain your costs. . . In essence that formula is a “Double Whammy” for profits.

I bring up Seeking Alpha because last  Wednesday their “Morning Breakfast” report let investors know that Walmart has became the first “$1 trillion” market capitalization traditional retailer.  (Market cap being defined by stock price multiplied by number of shares of stock).

And, on the heels of Friday’s big stock market advance and just for fun, I thought it would be interesting to see just how much one could have profited if they had bought Walmart stock when it was first introduced to the public

Here’s part of what Seeking Alpha (emphasis by Funeral Director Daily) said about Walmart and this $1 trillion market cap phenomena:

Walmart has become the first traditional retailer to achieve $1T market capitalization, joining the quadruple-comma club that includes its rival Amazon . WMT shares hit a record high on Tuesday, just two days after John Furner took the reins from longtime CEO Doug McMillon. Notably, Walmart is only the second non-tech firm to join the trillion-dollar ranks, after Warren Buffett’s Berkshire Hathaway .

Looking back: Sam Walton and his brother Bud Walton opened the first Walmart store in 1962 in Arkansas. The retailer capitalized on its low-cost supply chain, merchandise assortment, value pricing, and expansion into underserved markets to reach $1B in sales by 1980. Walmart went public in 1970 at $16.50/share – first listed as OTC before moving onto the NYSE in 1972. For those who bought in at the IPO, the effect of 12 stock splits since 1972 would turn a single original share into a conservative $500,000 today (this does not include reinvested dividends or a 3:1 split in Feb. 2024). Walmart now operates 4,600 locations across the U.S. The Waltons, the world’s wealthiest family, are the largest shareholders of the retail chain, with a combined net worth exceeding $470B.

Betting on tech: The retail giant’s ambitious transition into e-commerce prompted a move to the tech-heavy Nasdaq 100 late last year. To better compete with Amazon, Walmart embraced artificial intelligence, expanded its delivery capabilities to include same-day, and invested in its pharmacy business. This translated into increased memberships (12% growth Y/Y) and its most profitable quarter in Q2 this year. Walmart also partnered with OpenAI and Google, enabling shoppers to directly buy items through AI chatbots ChatGPT and Gemini.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  I was too young to be buying stocks when Walmart went public in 1970 and even if I was in my stock-buying years it’s debatable if I would have taken a flyer on a retailer from another part of the country that I had not heard of yet.  However, when you look at the $16.50 price per share at that time and follow the math as illustrated in the article, a 100-share purchase could have been done for $1,650 in 1970 and if you held the stock through all of the splits to where it is today would have amassed a total of $50 million in stock value today.  Almost unbelievable!!!

Let’s Compare:  Just to understand how valuable Walmart is today it has a $1 trillion dollar market capitalization.  If you look at the largest public company in Death Care, Service Corporation International (SCI), they have a market capitalization of about $12 billion. . . . .That would make the value of Walmart about 83 times the value of SCI.  Interesting.

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