COST is an above average company with great execution on it's business plan. However, the stock, which now trades at a RICH 44x FWD earnings, is beginning to look expensive - given that's a premium to the market's long term average of 15x earnings, and even still a 30% premium to COST's average valuation over the last 5 years.
Combined with the recent UMCSI readings which are bearish for consumer facing businesses, and the overbought RSI & ADX readings, it's time, at the very least, to take some profits in this name. We don't like outright shorting good companies unless they go parabolic though, so we're looking to pair a short here with something that we think is well positioned -- CTLT or COO. Well positioned names in a well positioned sector - this comes from our proprietary capital flows model.
Cheers all!
Combined with the recent UMCSI readings which are bearish for consumer facing businesses, and the overbought RSI & ADX readings, it's time, at the very least, to take some profits in this name. We don't like outright shorting good companies unless they go parabolic though, so we're looking to pair a short here with something that we think is well positioned -- CTLT or COO. Well positioned names in a well positioned sector - this comes from our proprietary capital flows model.
Cheers all!
🚨🚨🚨
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