The analyst who predicted the 2008 recession has just warned. If he's right, 1 Good Stock to Buy Now

Earlier this month, financial analyst Gary Shilling warned in an interview with CNBC that a recession could be "delayed." He noted that he had seen some of the traditional and reliable precursors of a recession, including the current inversion of the yield curve as well as small business cutbacks in spending and employment. He added that, on average, a recession starts within two years after the Fed starts raising interest rates. The Fed began raising rates in March 2022, so it has been just over two years since then.

Back in 2007-08, Shilling was one of the analysts who warned investors that a housing bubble was forming. This led to the Great Recession of 2008-09, which had long-term adverse effects on the economy. In other words, he has some street credibility in macroeconomic forecasting.

Recessions are usually bad for the stock market, and the mass of investors are looking for ways to cope with them. Facts have shown thatWal-Mart (NYSE: WMT)Strong performance during these periods. From Shilling's comments, Wal-Mart is a stock worth considering.

Wal-Mart is the low-cost leader.

Wal-Mart tends to do well in recessions for several reasons. For one thing, Wal-Mart sells a lot of everyday essentials that people will buy regardless of the economy. To date, the company is the largest car carrier in the United States, and is the largest competitor to its carriers.KeroseneThis gives the company a huge amount of flexibility and buying power to get the best prices. This gives the company a huge amount of modeling and buying power, which allows it to get the best prices. It then passes these low prices on to its customers.

The company is a low-cost leader and is not afraid to drive prices even lower in times of economic stress. In doing so, it was able to gain access to the market from traditional carriers andTarget The company has also gained a larger share of the market from retailers such as department stores and other daily necessities.

Wal-Mart has also benefited from the lower prices. In times of economic distress, even high-income people tend to look for lower-priced alternatives. In tough economic times, Wal-Mart tends to attract more high-income customers because of its lower everyday prices.

Over the past few years, Walmart has begun to make inroads into the higher-income demographic as more and more consumers struggle to cope with inflation. Wal-Mart's share of households with incomes over $100,000 is growing. It started with food carriers, but is now moving into the department store segment as well.

The company has been tilting the value of the曏 and convenience sides of the noodle in order to validate it and increase its share of higher-income customers. The company has been updating its stores, adding wider aisles and better lighting, and pickup and delivery services resonate with this demographic. Walmart+ paid subscription service is also popular among higher-income earners, offering discounted gas buttons, unlimited free shipping and free streaming media through Paramount+. The subscription service is the result of a partnership between the company andAmazonPrime competes with an annual fee of $98, or $12.95 if paid monthly.

The recession is likely to help Walmart accelerate the strides it has made in attracting higher-income customers. Services such as pickup and delivery and Walmart+ will also help to retain customers in the future. Meanwhile, once a new customer enters Walmart's ecosystem, the company has plenty of opportunities to sell them曏 and necessities, as well as a variety of other services ranging from pharmacy to automotive to financial services. This is important because it creates a long runway for future growth.

Beat the recession

In the last two major recessions (2020 and 2008-09), Walmart's stock price has outperformed theStandard & Poor's 500In 2020, at the start of the COVID-19 pandemic, Walmart outperformed the S&P 500 by 5 percentage points. But as early as March 2020, when the S&P 500 was down 251 TP3T from its high, Wal-Mart's stock price was up 21 TP3T. Meanwhile, during the 2008-09 housing crisis, Wal-Mart's stock price easily outperformed the S&P 500 by more than 56 percentage points.

The company has grown sales in each of the last two recessions. in 2020, its sales grew by nearly 21 TP3T, and in 2008, its sales grew by nearly 91 TP3T. given the peculiarities of a pandemic, 2008 may be more reflective of how Wal-Mart performs in a more typical recession. The company is also now more heavily weighted toward food carriers, so it may fare better in the next recession than it did in 2008.

The best thing about Wal-Mart, however, is that it can perform well in any environment. Over the past year, the company's stock price has risen more than 20% in an inflationary environment. At the same time, the company has seen solid sales growth of 61 TP3T and even faster operating income growth of 321 TP3T.

This makes Wal-Mart a best buy not only in a recession, but over the long term.

Should you invest $1,000 in Walmart now?

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John Mackey, former chief executive officer of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. geoffrey Seiler has no position in any of the stocks mentioned above. the Motley Fool owns shares of Amazon, Target, and Wal-Mart, which are recommended by The Motley Fool. the Motley Fool recommends Kroger. the Motley Fool has a disclosure policy. The Motley Fool recommends Kroger. The Motley Fool has a disclosure policy.

The analyst who predicted the 2008 recession just warned. If He's Right, Buy 1 Good Stock Now was originally published by The Motley Fool.