Writes:
As falling gas prices and growing job market afford consumers more spending cash heading into the holidays, investors are positioning for retailers like Wal-Mart Stores Inc. (WMT) to reap the benefits.
Demand for options that protect against future losses in Wal-Mart shares fell to the lowest level in more than five years relative to bullish ones, data compiled by Bloomberg show. Ownership of put options conveying the right to sell an exchange-traded fund tracking retail stocks has fallen to the lowest since May compared with calls giving the right to buy.
Investors are anticipating that the lowest crude oil prices in four years and the highest consumer confidence since 2007 will boost holiday sales for chain stores. With its focus on shoppers in lower income brackets, Wal-Mart is particularly well-positioned to thrive this holiday season, according to Walter Todd of Greenwood Capital Associates LLC.
?Wal-Mart?s customer base benefits more than anyone from the drop in gasoline,? Todd, who oversees about $1 billion as chief investment officer for Greenwood, South Carolina-based Greenwood Capital Associates, said in a Nov. 17 phone interview. ?You?re seeing confidence in the retail sector as a whole increase as gas prices fall. It makes sense that people would be inclined to be positive on the space heading into the holiday season given that backdrop.?
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