Why Wal-Mart is always a lousy investment

One of my favorite analyses is Wal-Mart vs. its suppliers. This is sort of like gold and gold stocks only Wal-Mart is usually a lousy investment.

Here we see Wal-Mart in black and the ISE Wal-Mart suppliers index. Even a technical mouth breather like me can see that it is much better to sell to Wal-Mart than own it. That low price guarantee makes for lots of sales but not so much profit.

Anyway, look at the divergence. And it's been going on for years. Until Wal-Mart does something to close this gap I'd rather look at the suppliers index components.