Costco Buy Or Sell
The detailed multi-page Analyst report does an even deeper dive on the company's vital statistics. In addition to all of the proprietary analysis in the Snapshot, the report also visually displays the four components of the Zacks Rank (Agreement, Magnitude, Upside and Surprise); provides a comprehensive overview of the company business drivers, complete with earnings and sales charts; a recap of their last earnings report; and a bulleted list of reasons to buy or sell the stock. It also includes an industry comparison table to see how your stock compares to its expanded industry, and the S&P 500.
costco buy or sell
Conventional wisdom says that a PEG ratio of 1 or less is considered good (at par or undervalued to its growth rate). A value greater than 1, in general, is not as good (overvalued to its growth rate). For example, a company with a P/E ratio of 25 and a growth rate of 20% would have a PEG ratio of 1.25 (25 / 20 = 1.25). A company with a P/E ratio of 40 and a growth rate of 50% would have a PEG ratio of 0.80 (40 / 50 = 0.80). Traditionally, investors would look at the stock with the lower P/E and deem it a bargain. But when compared to its growth rate, it does't have the earnings growth to justify its P/E. In this example, the one with the P/E of 40 is the better bargain because it is selling at a discount to its growth rate. So the PEG ratio tells you what you're paying for each unit of earnings growth.
A P/B of 1 means it's selling at its per share book value. A P/B of 2 means it's selling at 2 times its book value. A P/B of 0.5 means its selling at half its book value. Note; companies will typically sell for more than their book value in much the same way that a company will sell at a multiple of its earnings. The median P/B ratio for stocks in the S&P is just over 3. While a P/B of less than 3 would mean it's trading at a discount to the market, different industries have different median P/B values. So, as with other valuation metrics, it's a good idea to compare it to its relevant industry.
The 1 week price change reflects the collective buying and selling sentiment over the short-term. A strong weekly advance (especially when accompanied by increased volume) is a sought after metric for putting potential momentum stocks onto one's radar. Others will look for a pullback on the week as a good entry point, assuming the longer-term price changes (4 week, 12 weeks, etc.) are strong. The Momentum Score takes all of this and more into account.
First, a bit about Costco's business model. Costco doesn't make most of its profit by selling items in its warehouses. It actually relies on selling memberships. To shop at Costco, you have to sign up for a membership that will cost you either $60 for the basic version or $120 for the executive level. So, Costco is guaranteed a certain level of income before you even make a single shopping trip.
Now you might wonder why someone would pay to shop -- especially during difficult economic times. That's because Costco's dirt cheap prices on everything from food to gasoline make the annual fee worthwhile. Costco generally sells in bulk, so it can price items low.
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Remains above its 200-day moving average. Strong customer renewal rate. Pays only a 1% dividend, but great at selling a limited number of products. Customers buy bulk items. It's the only staples stock he owns, but likes this for its growth.
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Shares of Costco had a steady run higher last year. But like many stocks, the retailer struggled at the start of 2022. But Costco's correction was relatively light, and merely allowed the stock to form a proper base. This base propelled shares to new heights after a breakout in March. Meanwhile, the major indexes were selling off to new lows in February.
Costco might be the only retailer selling both $1.50 hot dogs and $250,000 diamond rings under the same roof. You can also buy a tank of gas, a chicken coop or a funeral casket there while you're at it. This is a huge part of Costco's allure. It sells a large variety of items inside a chain of nondescript warehouses and charges customers a $60 membership fee just to get in the door. Costco's buy-in-bulk branding also makes it an ideal place for consumer stockpiling.
When it comes to technical analysis, Costco stock had been showing strength as it became extended from a 545.39 breakout on Mar. 16. But shares reversed below the buy point this week and undercut support at the stock's 50-day line. Undercutting the prior buy point serves as a sell signal since the stock was previously well-extended from this entry.
Ahead of Costco Wholesale's (NASDAQ:COST) upcoming earnings report, the market has already begun to price-in an earnings miss based off of peers Walmart (WMT) and Target (TGT). While the entire retailer sector was hit hard after Target's massive earnings miss, Costco's daily decline was particularly shocking considering the historical relative strength of the stock. Rarely is COST down double digit percentages in a single day, especially when there is no direct news from the company. Additionally, there was a false tweet alleging that the company was raising the price of their hot dogs by $1. This price movement suggests panic selling from weak hands in the stock, and the selling could be premature considering that the earnings report has yet to come out.
Though unrelated on the corporate side (Sam's is owned by Walmart, for instance), for our purposes they're quite similar. They're warehouse stores where you can get that 55-gallon drum of ketchup and that pallet of bean dip you need for watching football. They also sell TVs in their, combined, 1,300-plus stores.
Costco is the biggest wholesale club operator in the country by sales, with about 530 stores in 40 states and a handful of countries. The stores carry about 4,000 items -- a fraction of the variety offered by rival discounters, such as Wal-Mart Stores (WMT (opens in new tab)) and Target (TGT (opens in new tab)). Costco caps mark-ups at about 14% above the cost of merchandise, well below that of other big retailers, which typically set prices at 25% to 50% above costs. Costco also provides financial services and sells gasoline. 041b061a72