5 Popular Stocks Past Their Prime

Sell Target; Buy Wal-Mart

Like McDonald’s, Wal-Mart (WMT) was set up to thrive during a weak economy.

Despite intense competition
with rival Target (TGT), Wal-Mart had resisted the trend to move its offerings more upscale. During
great times, this move was questionable. Today, that’s not the case. (See also: Don’t
Discount Wal-Mart Just Yet.)

Low prices are driving more and more customers to Wal-Mart at the expense of Target. And there’s more at work than just a low-price strategy; not
all discounters are doing well, as evidenced by same-store sale weakness shown recently in Costco (COST). (More
on COST here.)

Wal-Mart is stealing market share as it attracts customers who shunned it not so long ago. It’s now making plans to keep those new customers when
the economy turns. One example: Long known as an anti-labor firm, Wal-Mart is now supporting reform to give all workers health care.

Wal-Mart is the leader in this space. Sell TGT and buy WMT.

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