I sent in an application to ValueInvestorClub.com last week.  I've visited the site for a couple years, but never had the desire to fill-out their troublesome application for membership.

I got bored one night and figured I might as well blow my time filling out their application.

They say they only accept 250 members and I think I know 2 of them:  StokBlog's JanHendrick and Mohnish Pabrai.  JanHendrick could attest to whether or not they have 250 or more.

I imagine they probably get a ton of applications.  I'm sure a lot apply for the simple mistique of it.

Anyways, I wasn't sure what they were looking for, so I picked out what I would call one of my safest plays:  Wal-Mart (WMT) and wrote down a couple notes.  I didn't get fancy with EBITA, show them charts, trajectories, DCF, or provide a very verbose explanation of the next greatest widget.  Instead, I stuck to simple explanations generated from about 77 or so data points I look at when reviewing a company.  This is sort of the synopsis of all that data.

Since I had Notepad open with the notes for my applciation, I thought I'd share it with you if you're interested.

Whether my application is crap or not, I do not know.  If I got accepted, I may not even know since I go through my email rather quickly (deleting spam left and right).  I'm not sure who sends their email or what the subject line of a winning entry would even look like.  They told me it would take weeks or months before they got the time to review my application.  Chances are, I will forget by then.  In the end, my chances of getting in seem to be zero.

Anyways, I just wanted to share with you what I told them.  Here it is:

Wal-Mart (WMT):

- Book value has grown almost 200% over the past 10 years
- Book value has increased 9 out of the past 10 years
- Earnings Per Share has grown over 200% the past 10 years
- Earnings Per Share has grown EVERY year the past 10 years (even through the 2000-2002 bear market).
- Dividends have increased over 300% the past 10 years
- Dividends have risen EVERY year the past 10 years
- The stock price has gone up 100% the past 10 years, even though it's been stagnant for so long
- The stock price has had severe PE multiple compression the past 10 years, hence the stagnant stock price the past 5 years
- The company can get out of debt within 2 years if it had to get out of debt.
- The Return on Equity exceeded 19.8% per year the past 10 years
- The company is the low-cost provider in the industry. It's distribution network capability is extraordinary.
- The PE ratio has been trading at historic lows recently
- Warren Buffett owns some WMT
- Apathy has set into the stock
- WMT reduced capex spending which means profits will rise soon
- WMT management focused on higher ROE items (they are going after the best paybacks first)
- My intrisic value is ~$100/share, so I see a huge Margin of Safety with this stock
- Price-Sales ratio is low:  0.55
- WMT trading at historic P/E lows
- Earnings CAGR is 15.16% over 5 years and 17.37% over 10 years
- $15 Billion dollar stock buyback in the works
- China growth is a catalyst for this stock since it's already embedded in that country
- Since this is an international company, it is not fully-tied to the dollar, hence a slight hedge against the USD.

All stock buybacks do not work. Stock buybacks work when the economically advantageous to do it - this is the time for WMT.

- Vooch