Prefer owning WALMEX over WMT due to lower valuation (15x vs 40x) despite identical business model and long-term growth potential in Mexico.

Um interestingly, if you cross the border and you go to Mexico, you can basically buy Walmart Mexico, which is owned and controlled by Walmart, run by the Walmart people, exactly the same business model, uh the same expertise, the same know-how, but at a much like younger stage and probably like years, if not decades, of like growth ahead of it.

the Mexican retail market, as you can imagine, is a lot less mature than the US. Today, less than less than half of uh the US retail the Mexican retail market is like what they call like a modern retail.

It's still very much dominated by like traditional like bodega, you know, corner stores run by families.

And if you look at uh modern retail, Walmart actually owns or controls 50% share of grocery in modern retail in Mexico. It's even more dominant than in the US.

Uh and if you look at the different format they have, you know, the super centers, Walmart has 3,500 super centers in the US, it only has like 350 in Mexico. Walmart has 600 like Sam's Club in the US, it only has less than 100 in Mexico.

They also have a format that doesn't exist in the US called like Bodega Aurrera, which is a hard discounter that's also doing very well.

And so, you can imagine that over the next few years, over the next decade, Walmart's going to keep opening stores in Mexico for like many years to come. And those stores keep attracting more and more consumers.

And so, the same store sales are compounding, you know, like mid-high single digits, uh and they should keep growing for many years to come.

And so, you have a business that's basically Walmart, you know, like 20 or 25 years ago. Yet, you only pay 15 times earnings because it's in Mexico.

And so, if I have a choice to make, I've used it rather own Walmart Mexico for the next, you know, 10, 15, 20 years than buying Walmart today in the US at 40 times earnings.

Um same business, same expertise, same people. Uh we know that business model works, uh but you just buy it uh at a big discount because it happens to be listed in in Mexico.

Yeah, it's it's a great question. So, Walmart entered Mexico in the in the mid-1990s, bought that company, so they own 71 or 72% of Walmart Mexico. Um, they kept it listed, uh, in Mexico, I think, for you know, like local reason to have a a local listing, to make sure that the politician, the regulators like perceived you as a as a Mexican company.

Uh, you have some Mexican pension fund which are invested as well. And so, I think that creates some some local goodwill. But, they obviously control it with, you know, 71 72% of of of of the shareholding and they've run it for almost like 30 years.

So, it's very much Walmart, but it just happened to be to be listed in in Mexico.

And they get to fully consolidate it, obviously, um, given their 70% ownership. So, you you get that multiple on on, you know, the entire operation.