Used VectorVest's free analysis and was pleased to see that they do not agree with the broker not mentioned above. Enjoy the read, you might say its "excellent".
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Thank you for using VectorVest
Stock Analysis of Costco Cos
Thank you for requesting an analysis of Costco Cos from VectorVest
ProGraphics. The ticker symbol for Costco Cos is COST. COST is
traded on the NASDAQ and options are available on this stock.
PRICE: COST closed on 10/23/1998 at $57.10 per share.
VALUE: COST has a Value of $70.2 per share. Value is the
foundation of the VectorVest system. It is a measure of what a stock
is currently worth. Value is based upon earnings, earnings growth rate,
dividend payments, dividend growth rate, and financial performance.
Current interest and inflation rates also play an important role in the
computation of Value. When interest and/or inflation rates decrease,
Value goes up. When interest rates and inflation increase, Value goes
down. Sooner or later a stock's Price and Value always converge.
RV (Relative Value): COST has an RV of 1.32. On a scale of
0.00 to 2.00, an RV of 1.32 is excellent. RV reflects the long-term
price appreciation potential of the stock compared to an alternative
investment in AAA Corporate Bonds. Stocks with RV ratings above
1.00 have attractive upside potential. A stock will have an RV greater
than 1.00 when its Value is greater than Price, and its Relative Safety
(see below) and forecasted earnings growth rate are above average.
In some cases, however, a stock's RV will be above 1.00 even though
its Value is well below Price. This happens when a stock has an
exemplary record of financial performance and an above average
earnings growth rate. In this case, the stock is currently selling at a
premium, and the investor is banking on future earnings growth to
drive the stock's price higher. This information is very useful not only in
knowing whether or not a stock has favorable price appreciation
potential, but it also solves the riddle of whether to buy high growth,
high P/E, or low growth, low P/E stocks.
We believe that RV ratings above 1.00 are required to consistently
achieve above average capital gains in the stock market.
RS (Relative Safety): COST has an RS rating of 1.32. On a scale
of 0.00 to 2.00, an RS of 1.32 is excellent. VectorVest looks at safety
from the viewpoint of an equity investor (one who is buying stock of a
company) rather than that of a purchaser of debt (one who is lending
money to the company). From this perspective, consistency of
financial and operating performance, stock price appreciation history,
and price volatility are the key factors used in the evaluation of
Relative Safety (RS). Debt to equity ratio, capitalization, sales volume,
business longevity and other factors are also considered, but to a
lesser degree.
VectorVest favors steady, predictable performers. All stocks are
rated on a scale of 0.00 to 2.00. A stock with an RS greater than
1.00 is safer and more predictable than the average of all stocks. A
stock with an RS less than 1.00 is less predictable and riskier than the
average stock.
RT (Relative Timing): COST has an RT rating of 1.49. On a
scale of 0.00 to 2.00, an RT of 1.49 is excellent. RT is a fast,
responsive, short-term price trend indicator. It analyzes the direction,
magnitude, and dynamics of a stock's price behavior over the last 13
weeks; then reflects and projects the short-term price performance of
the stock. Once a stock's Price has established a strong trend, it is
expected to continue that trend for the short-term. If the trend
dissipates, RT will gravitate towards 1.00. Should the price change
dramatically, RT will notice the crucial turning point. When warranted,
it will explode from a Price low and dive from a Price high.
All stocks are rated on a scale of 0.00 to 2.00. If RT is above
1.00,the stock's Price is in an uptrend. Below 1.00, the stock's Price
is in a downtrend.
VST-Vector (VST): COST has a VST-Vector rating of 1.38. On
a scale of 0.00 to 2.00, an VST of 1.38 is excellent. VST-Vector
solves the dilemma of balancing Value, Safety and Timing. Stocks with
high RV values often have low RS values, or stocks withlow RV and
RS values have high RT's. How can we find the stocks with the best
combinations of Value, Safety, and Timing?
The classic vector formula (square root of the sum of the squares)
handles this problem. It combines a set of forces into a single indicator
for ranking every stock in the VectorVest database. Stocks with the
highest VST-Vector have the best combinations of Value, Safety and
Timing. These are the ones to own for above average capital
application.
GRT (Growth Rate): COST has a GRT of 16 % per year. This is
very good. GRT stands for forecasted Earnings Growth Rate in
percent per year. GRT is updated each week for every stock. Watch
GRT trends very carefully. If the GRT trend is up, the stock's Price
will likely rise. If the GRT trend is down, the stock's Price will increase
more slowly, cease to increase, or subsequently fall.
Recommendation (REC): COST has a Buy recommendation.
REC reflects the cumulative effect of all the VectorVest parameters
working together. These parameters are designed to help investors
buy safe, undervalued stocks which are rising in price, and to avoid or
sell risky, overvalued stocks which are falling in price.
VectorVest is tuned to give an "H" or "B" signal when a stock's price
is approximately 10% above a recent low, and an "S" signal when the
stock's price is approximately 10% below a recent high. High RV, RS
stocks are favored toward receiving "B" REC's, and sheltered from
receiving "S" RECs.
STOP-PRICE: COST has a Stop-Price of 50.60 per share. This is
6.50 or 11.4% belowits current closing Price. VectorVest analyzes
over 6,000 stocks each day for Value, Safety and Timing, and
calculates a Stop-Price for each stock. These Stop-Prices are based
upon 13 week moving averages of closing prices, and are fine-tuned
according to each stock's fundamentals.
In the VectorVest system, a stock gets a "B" or an "H"
recommendation if its price is above its Stop-Price, and an "S"
recommendation if its price is below its Stop-Price.
DIV (Dividend): COST does not pay a dividend. VectorVest
focuses on annual, regular, cash dividends indicated by the most
recent disbursement. Special distributions, one-time payments, stock
dividends, etc., generally are not included in Dividend (DIV).
DY (Dividend Yield): COST has a DY of 0 percent. This is
above the current market average of percent. DY equals 100 x
(DIV/PRICE), and is expressed as a percentage.
EY (Earnings Yield): COST has an EY of 4.28%. This is above
the current market average of %. EY equals 100 x (EARNINGS PER
SHARE/PRICE), and is expressed as a percentage.
EPS (Earnings Per Share): COST has an EPS of $2.44 per
share. EPS stands for leading 12 months Earnings Per Share.
VectorVest determines this forecast from a combination of recent
earnings performance and traditional fiscal and/or calendar year
earnings forecasts.
P/E (Price to Earnings Ratio): COST has a P/E ratio of 23.38.
This ratio is computed daily based upon Price and EPS. P/E =
Price/EPS.
GPE (Growth to P/E Ratio): COST has a GPE of 0.68. This
ratio suggests that This ratio suggests that COSTis overvalued.
Growth to P/E ratio is a popular measure of stock valuation which
compares Earnings Growth Rate (GRT) to Price Earnings ratio (P/E).
A stock is considered to be undervalued when GPE is greater than
1.00, and vice-versa. VectorVest believes that RV is a much better
indicator of long-term value. The RV of 1.32 for COSTis excellent.
DS (Dividend Safety): COST has a DS of 0. On a scale of 0 to
99, a DS of 0 is poor. DS is defined as the assurance that regular cash
dividends will be declared and paid at current or at higher rates for the
foreseeable future. Stocks with DS values above 50 on a scale of 0 to
99 areabove average in safety.
RISK (Dividend Risk): COST does not pay a dividend. All
stocks in the VectorVest system that pay dividends are classified as
having Low, Medium or High Dividend Risk (RISK). Stocks with DS
values above 50 are above average in safety. These stocks are
classified as having LOW or MEDIUM RISK. Stocks with DS values
below 50 are below average in safety and are classified as having
HIGH Risk.
DG (Dividend Growth): COST has a DG of 0 percent per year.
Dividend Growth is a subtle yet important indicator of a company's
historical financial performance and the board's current outlook on the
future use of funds.
YSG-VECTOR (Yield-Safety-Growth Vector): COST has a
YSG-Vector of 0. On a scale of 0.00 to 2.00, an YSG-Vector rating
of 0 is very poor. VectorVest combines Dividend YIELD, SAFETY
and GROWTH into a single parameter. YSG-Vector allows direct
comparison of all dividend paying stocks. Stocks with the highest
YSG-Vector values have the best combinations of Dividend Yield,
Safety and Growth. These are the stocks to buy for above average
current income and long-term growth.
VOL(100)s: COST traded 1245700 shares on 10/23/1998.
AVG VOL(100)s: COST has an Average Volume of 3081988.
Average Volume is 50 day moving average of daily volume as
computed by VectorVest.
% VOL: COST had a Volume change of -59.6% from its 50 day
moving average volume.
OPEN: COST opened trading at $57.60 per share on 10/23/1998.
HIGH: COST traded at a high of $58.80 per share on 10/23/1998.
LOW: COST traded at a low of $57.00 per share on 10/23/1998.
CLOSE: COST Closed trading at $57.10 per share on 10/23/1998.
% PRC: COST showed a Price change of -1.5% from the prior
day's closing price.
INDUSTRY: COSThas been assigned to the Retail
(Discount\Variety) Group. VectorVest classifies stocks into over 190
Industry Groups and 50 Business Sectors.
COST has well above average safety with well above average upside
potential. It reflects a stock which is likely to give well above average,
quite consistent returns over the long term.
The basic strategy of VectorVest is to buy low risk, high reward
stocks. We suggest that Prudent investors buy enough high Relative
Value, high Relative Safety stocks to keep the overall RV and RS
ratings of their portfolios above 1.00. As you do this, you'll find that
your risk will go down and your investment performance will improve.
Not a bad combination.
Thank you for your interest in VectorVest ProGraphics.
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