Radioactive Seafood Didn't Damage This Retail Giant's Stock
byCOVID-19-
I have an affinity for strange news stories... One of these caught my attention recently. On August 19, news outlets across the country started shouting about "radioactive shrimp."
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Radioactive Seafood Didn't Damage This Retail Giant's Stock
By Ethan Goldman, junior analyst, Chaikin Analytics
I have an affinity for strange news stories...
One of these caught my attention recently. On August 19, news outlets across the country started shouting about "radioactive shrimp."
These shrimp were destined to sell at Walmart (WMT).
A deeper dive found that certain loads of imported shrimp contained cesium-137. The U.S. Food and Drug Administration ("FDA") confirmed these bags of shrimp were, in fact, radioactive.
But there was something interesting about the FDA's report...
The levels of radiation were about 17 times lower than what the FDA considers to be an immediate danger.
For comparison, the amount of radiation these shrimp gave off is about the same as a banana. A single banana gives a 0.1 microsievert dose of radiation when eaten.
Now, keep in mind that radiation is natural. We receive about 10 microsieverts of radiation from our surroundings every day.
Your risk of cancer doesn't increase for a while. It isn't until around a 100,000-microsievert dose of radiation that increased risk of death from cancer becomes evident.
You would need to eat 1 million bananas in quick succession before that happens.
Folks, bananas contain trace amounts of potassium-40, which you can find in nature.
But with the shrimp that made the news recently, the FDA was concerned because these contained the man-made cesium-137. It's a by-product of uranium-235-based nuclear fission...
And as you probably know, nuclear fission is a process used for nuclear power or weapons.
It's not clear why these shrimp had 100 times the normal amount of cesium-137.
And with such a bizarre story – and Walmart in the crosshairs because of it – you would probably expect the stock to take a hit. As I'll explain, that didn't happen. However, another factor is causing weakness for the stock right now...
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Weak Earnings Hurt Walmart's Stock
Walmart's stock didn't move in a spectacular way after the news about the shrimp emerged on August 19. In fact, WMT shares popped by about 1% the next day.
It didn't seem like folks were dumping the stock based on the sensationalized news.
But the next day, Walmart dropped by more than 4%.
However, that wasn't due to radioactive shrimp...
On August 21, Walmart announced second-quarter earnings. And the company missed earnings expectations.
In fact, it was Walmart's first earnings miss since May 2022.
So with all this in mind, let's see what the Power Gauge says right now...
The Power Gauge Is Flashing a Warning on Walmart
Keep in mind that Walmart's stock surged more than 70% last year. Earlier this year, the stock was still moving higher... but it collapsed in mid-February. Since then, the stock has traded largely sideways. Take a look...
As you can see, Walmart's Power Gauge rating has also struggled in recent months.
The stock spent most of 2024 in "bullish" territory. But as it stalled out earlier this year, its Power Gauge rating dropped.
Walmart's recent earnings could be a fluke, or signs of trouble ahead...
Again, the stock has been floundering in recent months. And even worse, the Power Gauge gives Walmart a "bearish" rating right now.
Sure, Walmart could soar again. It's a titan in retail, after all. But for now, the Power Gauge is flashing caution for the stock.
I'll save my capital for when the Power Gauge sees a more promising picture for Walmart. But either way, I probably won't be eating shrimp from there anytime soon.
Good investing,
Ethan Goldman
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.17%
12
12
6
S&P 500
+0.35%
161
237
101
Nasdaq
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28
57
15
Small Caps
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733
1006
298
Bonds
+0.66%
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are Bullish. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Energy
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Consumer Discretionary
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Information Technology
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Financial
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Materials
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Real Estate
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Health Care
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* * * *
Industry Focus
Pharmaceuticals Services
22
20
0
Over the past 6 months, the Pharmaceuticals subsector (XPH) has underperformed the S&P 500 by -3.15%. However, its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #3 of 21 subsectors and has moved up 3 slots over the past week.
Top Stocks
AMPH
Amphastar Pharmaceut
AMRX
Amneal Pharmaceutica
ANIP
ANI Pharmaceuticals,
* * * *
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Gainers
DDOG
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FICO
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A
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TTD
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CRWD
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Losers
HRL
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COO
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BF.B
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BBY
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TECH
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* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
Earnings Surprises
BURL Burlington Stores, Inc.
Q2
$1.59
Beat by $0.30
DG Dollar General Corporation
Q2
$1.86
Beat by $0.29
ULTA Ulta Beauty, Inc.
Q2
$5.78
Beat by $0.67
ADSK Autodesk, Inc.
Q2
$2.62
Beat by $0.17
BBY Best Buy Co., Inc.
Q2
$1.28
Beat by $0.06
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