Costco is consistently increasing their revenues as they are continually expanding and growing popularity. I can’t see this stock loosing revenue any time soon. Their cash flow is high and they are a recession proof stock because they make 75% of their income through memberships and I don’t think people are going to stop shopping there anytime soon. Their expected to grow at 8% every year and have a good amount of assets for their book value. Yes their P/E of 36 is expensive but combined with their dividend and their consistent growth I don’t see how you can loose money on it in the long term.
PS: This stock is most valuable to low risk investors who are looking for almost guaranteed earnings and dividend growth
stupidGuy
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I agree with everything you say in your description, they have strong fundamentals but given its post March 23rd performance I'm wondering if this is the right time to go long?
PS: I am a complete noob when it comes to trading, so please ignore if the question seems stupid.
BlueFlamingo
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@stupidGuy sorry for not responding earlier and yes I think now is a great time to go long seeing the stock price under $300. Last recession their revenues stopped growing but did not drop and their EPS only went down 14% (many other companies went negative) which in 2010 more than recovered that drop. They also have 8 billion in cash incase anything happens. The main reason I’m bullish on Costco is that their revenues and earnings keep growing smoothly over time so I don’t think they will go bankrupt anytime soon