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Wal-Mart’s growth was astounding from the 1940s until the late 1980s and on until today. Now the company wants to understand you.
Photos: nsub1

The last three days of the trading week were dismal � except among the stocks of the Yonder 40. While the rest of the market lost 4 percent (the Dow), 6.5 percent (NASDAQ) or 3.7 percent (the S&P 500), the stalwart 40, stocks that reflect the rural economy, dropped by less than one percent.

Maybe the Yonder 40 got all the bad out of its system before this week � since the rural stock index is down 5.5 percent since July 1. In the last week, however, half the 40 gained ground in a market where most stocks were headed the other direction.

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One of the leaders was Lee Enterprises, publishers of community newspapers throughout the Midwest. Lee stock has been dropping for months, along with that of other newspaper companies. This week, however, Lee reported that fourth quarter profits nearly doubled over last year, although much of this gain derived from a one-time tax change. Interestingly, Chief Executive Mary Junck said online advertising has surpassed national advertising as a revenue source for the company � a function, perhaps, both of raising online sales and plummeting national advertising.

Mining firms continued to do well in a market that is anticipating mergers in this sector. Oklahoma�s Cimarex reported third quarter net income 22 percent below last year, but the stock still jumped over three percent this week. Peabody Energy was up nearly 9 percent for the week even though the company reported charges that dropped third quarter profits 77 percent from a year ago.


Retail sales continued to haunt the markets. Retailers reported their results for October last week and they were the worst in 12 years � for both the luxury of Nordstrom and the wide aisles of Wal-Mart. Among the Yonder 40, Cato Stores reported same store sales 8 percent below a year ago. Family Dollar did well by breaking even. Both stocks fell. (See chart below for full results of the Yonder 40.)

Time Magazine carried an interesting report on a �struggling� Wal-Mart. It seems the worst-performing stores in the Wal-Mart empire are located in or near the large coastal cities � regions and cultures far away from the company�s Arkansas roots. Time reports, �The company that Sam Walton created for the rural South is being massively overhauled to compete in the more urban, more competitive universe where it now lives.� Wal-Mart is decentralizing its organization and is stocking its stores to reflect local demands. City stores are getting citified.

More than that, Wal-Mart is trying to identify with the culture of the city, Time reports. (For example, Wal-Mart is selling dog sweaters in Dallas.) “It’s going to tell the customer that we understand what they need,” says company executive Eduardo Castro-Wright. “We not only understand what you need, we respect your point of view. We want to be your store of choice because we understand you better than anyone else in the marketplace.” So, Wal-Mart is your new best friend!

In other Yonder 40 news:

� Dean Foods, the milk seller, continues to struggle, reporting sharply reduced profits from a year ago. “In the third quarter, we were faced with the most difficult operating environment in our history,” said Chairman and Chief Executive Gregg Engles. “Raw milk prices rose rapidly to record highs and we were challenged to increase our pricing fast enough to keep pace. As prices rose, more people shifted to private label milk.”
� Monsanto continues to thrive. The company predicted first quarter earnings above analysts� expectations, which pushed stock prices briefly to near the $100 a share mark. The company predicted it would double earnings in the next five years.

Here are the results for the full Yonder 40, the week ending November 9, 2007:

CompaniesTickerPrice November 9Price Change for WeekPercent Change for Week
Alico Inc.ALCO44.13$0.972.2%
Andersons Inc.ANDE40.98-$5.06-11.0%
Burlington Northern Santa Fe Corp.BNI84.66-$2.06-2.4%
Berkshire HathawayBRKB4,433.00$31.000.7%
Bassett FurnitureBSET9.98-$0.44-4.2%
Peabody Energy Corp.BTU55.87$4.518.8%
Cabela’s Inc.CAB17.16-$1.64-8.7%
ConAgra Foods Inc.CAG23.16-$0.06-0.3%
Cato Corp. Cl ACTR17.9-$0.17-0.9%
Citizens CommunicationsCZN12.6-$0.31-2.4%
Deere & Co.DE153.03$0.300.2%
Dean Foods Co.DF26.12-$0.48-1.8%
DIRECTV GroupDTV26.78$1.164.5%
Family Dollar Stores Inc.FDO22.53-$1.08-4.6%
Fleetwood Enterprises Inc.FLE9.01$0.667.9%
FairPoint CommunicationsFRP15.85-$2.24-12.4%
Gaylord Entertainment Co.GET45.12-$4.53-9.1%
Hormel FoodsHRL35.4$0.030.1%
International Speedway Corp.ISCA44.28$0.290.7%
Lee EnterprisesLEE15.73$0.624.1%
Mohawk Industries Inc.MHK80.13-$3.29-3.9%
Monsanto Co.MON96.73$2.302.4%
Mine Safety Appliances Co.MSA45.8$1.042.3%
Southwest BancorpOKSB17.4$0.271.6%
Plum Creek Timber REITPCL42.96-$0.13-0.3%
Penn Virginia Corp.PVA48.27$0.170.4%
Ralcorp HoldingsRAH55.89$0.701.3%
Regions Financial Corp.RF25.03-$0.21-0.8%
Sturm Ruger & Co.RGR8.01-$0.39-4.6%
Smithfield FoodsSFD28.42$0.271.0%
Skywest Inc.SKYW27.59$1.064.0%
Southern Co.SO35.85$0.130.4%
Stage Stores Inc.SSI16.27-$1.27-7.2%
Tractor Supply Co.TSCO39.04-$1.70-4.2%
Tyson FoodsTSN14.75-$0.37-2.4%
UST Inc.UST52.8$1.222.4%
Waddell & Reed Financial Inc.WDR32.65-$0.69-2.1%
Walter IndustriesWLT35.65$1.113.2%
Wal-Mart StoresWMT42.9-$1.29-2.9%
Cimarex EnergyXEC41.51$1.363.4%

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