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Stocks W / Williams-Sonoma

URL:  http://boards.fool.com/wal-mart-v-wsm-15296427.aspx

Subject:  Wal-Mart v. WSM Date:  7/2/2001  10:42 PM
Author:  aFord Number:  106 of 123

Tell me again why I should be buying WSM when its P/E ratio is higher than WMT on slowing earnings?

WMT is the category killer in its class. It has taken mastery of the distribution system to an art and a science. It experienced a top about $70 18 months ago, on the buzz about its retail website. That was in an expanding economy. It has lost about 28%. Its P/E is still too high for a grocery store with a slowing retail behemoth joined at the hip.

WSM, on the other hand, appears (to me) to be saddled with a distribution system based on centers owned separately by two top level folks. It jumped on news about the new website. It is selling into a contracting economy.

The question is when, not if, it realigns with a more realistic P/E ratio. Say, $20 a share. We'll know soon.

--Ford
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