On Thursday, Walmart (WMT) announced Walmart Pet Care. The retailer now includes in its offerings such services as pet insurance, a pharmacy, and even dog walking and pet sitting services.
This is all part of the company’s pivot to capture market share from Amazon (AMZN), in conjunction with the digital transformation the company has undertaken this year. The services add a rich potential source of revenue for the company, as it looks to become a one-stop-shop for everything.
The company’s biggest change this year has been Walmart+, a grocery-based subscription service. Given the strong spending trends that people make regarding their pets, this latest change can not only bring in more revenue for the company, but allow it to expand its profit margins as well.
- Insurance For Your Investments? The Answer...Options
Investors are reevaluating how to do things in 2021. With Options, a stock’s price can drop to zero, but you can never lose more than the option’s premium and you know the full amount at risk right from the get-go.
Options are the most dependable form of hedge, and this also makes them safer than stocks.
Action to take: We’ve long been fans of Walmart as a company for driving prices down. That’s created a moat around the company, but has also limited its profit margins. New service expansions can drive margins higher, which should be great for shares.
Walmart shares are just off all-time highs, but with the latest developments, shares aren’t too overpriced for a best-of-industry company.
For traders, however, this latest news and the holiday shopping season should see a solid bounce higher in the coming months. The March 2021 $155 calls, trading for around $5.60, are reasonably priced to take advantage of that trend and should deliver mid-to-high double-digit returns.