While most investors are focused on big tech names right now, conventional companies also benefit from today’s tech trends. Companies that can integrate new technologies can provide better service, and potentially even keep costs down.
A company that has the lowest costs in the industry tends to have low profit margins. But it also has a big market share, as consumers are largely price-focused. That can still lead to great returns, especially as new technology improves profit margins.
Retail isn’t known for big profit margins. And there’s some steep competition. Walmart (WMT) is looking to keep competition at bay with investments in technologies like drone deliveries.
Its new drone delivery service can even drop off eggs at your door without breaking any. So far, that puts them a bit ahead of competitors.
Action to take: Shares of the retail leader are priced at about 25 times forward earnings, about in-line with how they usually trade. It’s clear they’re working to keep and grow their market share with new technologies, so they can likely continue to expand revenues for some time.
That makes shares a reasonable buy at current prices or on any drop lower. At present, shares yield about 1.5 percent.
For traders, the stock has been trending higher this year. The December $165 calls, last going for about $3.75, could see high double-digit gains on a further move higher between now and the end of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.