Why Wal-Mart Stock Gained 11% in November

MarketsMotley Fool

What happened 

Wal-Mart (NYSE: WMT), the world's biggest retailer, gained 11% last month, according to data provided by S&P Global Market Intelligence, compared to a 2.8% boost for the broader market.

Continue Reading Below

The increase contributed to an epic run for shareholders this year as Wal-Mart's 41% gain puts it in fifth place among the 30 members of the Dow in terms of year-to-date performance.

So what

November's rally was sparked by a surprisingly strong third-quarter earnings report. In that Nov. 16 announcement, Wal-Mart revealed that comparable-store sales gains sped up to a 2.7% pace from 1.8% in the prior quarter as customer traffic growth improved.

The retailer logged impressive results in its e-commerce business, too, with a 50% sales spike likely translating into market share gains in that key niche.

Now what

Contrary to many investors' fears, Wal-Mart is primed for a decent holiday shopping season thanks to a mix of rising digital sales and increasing customer traffic at its existing locations. But whether its stock price rally carries on into 2018 -- or falls flat -- will depend on management's ability to convert those top-line wins into profit growth since Wal-Mart's net income has now declined for two consecutive fiscal years.

10 stocks we like better than Wal-Mart StoresWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Wal-Mart Stores wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of December 4, 2017

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.