Costco represents astonishing value
I've been following Costco for the past 3 years and I recently took advantage of the market downturn to purchase much more stock.
After years of quietly growing in relative obscurity, I believe that Costco has reached "critical mass". Sales are rising, earnings momentum is fantastic, and cash flow is a torrent.
I shop at the Costcos in Novato, CA and San Francisco. Both have been very succesful. In fact, while everyone was worrying about the stock market collapsing and the world financial system coming to an end, I stopped by the Novato store to pick up some supplies. I can assure everyone here that the warehouse was not going out of business!
In my opinion, Costco is perhaps the most exciting retail story to come along since Home Depot. In fact, as an interesting exercise, compare Home Depot's financials and market cap to Costco's.
I'm pleased that there is skepticism and worry about the stock.
People are worried that the P/E is too rich [It's a bargain, check out free cash flow, debt to equity, and return on invested capital].
People are worried that the internet will "steal" sales [Note that Yahoo's market cap is damn near Costco's!!! However, I'm willing to bet that people will keep buying their paper towels at Costco.]
This stock is going significantly higher. |
