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To: D.B. Cooper who wrote (10113)	12/12/2002 9:13:45 AM
From: Sig	Respond to of 13815

DB: I was hoping you would put that chart up so I could use it fo other things Despite charts not being perfect, they should surely be much better than responding to "news" Yesterday some analyst said that ALL the techs are going HE$$. ( bears will lie, and often) And I agree some of these retailers have been knocked down too far. Beas looks good to me ( many stocks do, even in 2000) Will just get a few more calls Good luck Sig

To: D.B. Cooper who wrote (10113)	12/12/2002 11:13:12 AM
From: D.B. Cooper	Read Replies (1) \| Respond to of 13815

(COST is way oversold IMHO) Market Report -- Story Stocks (COST) December 12, 2002 10:24:00 AM ET Costco (COST) $29.19 (+0.71) (+2.49%) Costco reports another good quarter with strong revenue growth (8.6%) and meets estimates. Costco now has one of the characteristics of a potentially good investment - the fundamentals and the stock price have completely opposite trends. The fundamentals are headed up, but the stock is headed down. The past year has shown solid growth on a year-over-year basis and every quarter is now higher than the equivalent quarter in 2000. Revenue increased 9% - earnings increased 8%. Whenever you have net income increasing at a faster rate than sales you have the possibility for good value creation. But the stock is now at a two-year low and headed lower. Concerns about future growth are sometimes pointed to for the reason - growth is slower - but Costco's price/sales ratio is only 0.33, just one-third of Wal-Mart's 0.96 ratio. If you believe in the "low price mega-warehouse" model, Costco is the most attractive looking investment possibility, in our opinion. Costco stock has declined over the past year because of continued lowering of growth estimates. However, it is now starting to look like the valuation declines were overdone. Try finding companies with 9% revenue growth and 12% earnings growth over the past year. It is not easy. The Costco model is extremely intriguing because it follows a theme that we have stressed before - value is shifting to those who apply technology, not those who create technology. Wal-Mart and Costco both fit that model. The use of technology to analyze buying habits and adjust inventory levels and pricing is Costco is a key factor in the companies success. (Analyzing Costco's capital expenditure trends just went on the to-do list.) Costco is often viewed as a threat to supermarkets - but the real threat is to the branded consumer item market. Costco has no qualms about limiting choice of brands in the store - you do not get a choice of Coke or Pepsi in many Costco's, it's one or the other. People who buy tires at Costco will buy whatever brand Costco chooses to offer. This gives Costco extreme pricing pressure on vendors, once Costco becomes a significant distributor for any of the brand vendors. If Costco ever reaches that type of scale - where they can exert pricing pressure on major vendors of consumer items, it will be a far more valuable company than it is today - that long-term vision is one reason to look deeper into Costco. The strength of Costco's growth, even in a slow economic period is very reassuring, and the scalable nature of today's earnings reports, combined with the possibility of becoming a prime distribution source for consumer items, makes Costco pretty intriguing. Today's earnings report may not be reason enough to open new positions, but it certainly justifies putting Costco on research list, which we are going to do. - Robert V. Green