In his latest quarterly filing with the Securities and Exchange Commission, multi-billionaire investor Warren Buffett revealed that he spent almost $900 million to purchase 18 million shares of Wal-Mart.
Buffett’s friend and fellow billionaire Bill Gates also owns a large stake in Wal-Mart through his charitable foundation.
Known for ever day low prices, Wal-Mart has seen earnings grow throughout the recession. Meanwhile, other retailers have suffered losses and many have closed. Wal-Mart appeals to the value-conscious consumer.
Other retailers that offer quality to frugal shoppers are also faring well. The TJX Companies, for example, reported earnings growth of 32 percent in the most recent quarter. This company runs discount stores like T.J. Maxx and Marshalls.
Luxury retailer Saks also reported a profit for the quarter, but that came from cutting costs.
While Saks saw its sales fall by nearly 15 percent, TJX and Wal Mart are both increasing sales.
The only good news for Saks is that sales increased at its discount brand, Off Saks.
Nordstrom reported the same trend. Sales are down at its full price stores but holding up well at its off-price Nordstrom Rack.
Other stores seeing big gains in sales include Family Dollar Store, Big Lots, and Dollar Tree.
Buffett bought the leader — Wal-Mart is the largest discount retailer in the world.
Smaller investors can follow in his footsteps and bet that bargain shopping is here to stay. This may well be the brightest light in an economy struggling to recover.
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