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Wal-Mart Should Consider Going Private

Tickers in this article: COST KR TGT WMT

NEW YORK ( TheStreet) -- Wal-Mart has a big problem. It's getting too big to invest in.

Over the last year, the stock is up less than 8%. Shares in rival Costco are up 21%, Target is up 24%, and Kroger is up nearly 64%.

Those three retail rivals, between them, are just 60% of Wal-Mart's size. With nearly $470 billion in sales last year, the needle is just hard to move for Wal-Mart.

Consider. Between 2011 and 2012 Wal-Mart sales grew about $23 billion. Sounds great, but it's barely 5%, the same growth rate as Target. Kroger sales grew just $6 billion, but that's 6% growth. Costco's $10 billion sales gain was still 11% growth.

Then there is the cost of maintaining that size, and engineering that growth:

All this publicity might make you want to take the whole company private.

The thought may be occurring to founder Sam Walton's kids, who have kept stakes in the company through Walton Enterprises LLC . The trust now owns almost 49% of the common stock , family members themselves own another 1.29%, and when the latest $15 billion stock buyback is done those percentages will rise.

This makes Wal-Mart a "controlled company," meaning it's no longer required to have an independent board. The company denied it would start running that way at its annual meeting last month, but the board is shrinking, the percentage of outsiders going down.

At some point, if the law of large numbers discourages investors, if the stock buybacks continue, we could reach a point where the family decides a tender offer for the entire company makes sense.

There are large private companies that grow much faster than public ones. Privately-held Koch Industries managed to double its revenue from 2000 to 2011, expanding company-wide employment fivefold, as the Wichita Eagle reported with pride.