Mad Money recommends Costco here is our take
Mad Money recommended Costco on March 24 (Mad money Link).
Costco Wholesale Corporation (Costco) operates membership warehouses based on the concept that offering its members very low prices on a limited selection of nationally branded and selected private-label products in a range of merchandise categories will produce high sales volumes and rapid inventory turnover. It buys the majority of its merchandise directly from manufacturers and route it to a cross-docking consolidation point (depot) or directly to its warehouses. More from Reuters
Costco saw a significant growth in the first quarter of 2008 and its first quarter same store growth was 7 percent which was greater than estimated..(source CNN) Also with the slowing economy and increasing commodity prices, consumers are cutting on there spending. What we are witnessing now, is that consumers are eating out less and spending more at the Grocery stores. The major beneficiaries are the club stores (Costco (COST), BJ's (BJ), Sam's), low-end discounters (Wal-mart (WMT)) and some price competitive grocery stores (Super Valu (SVU), Safeway (SWY), Kroger (KR)). Club store same sales have jumped with Costco reporting same sales growth of +7% while BJ's has delivered its strongest numbers in years. Walmart has just reported increased guidance based on increased store traffic and larger sales $ per customer shopping trip. Consumers are clearly seeking better value for their food purchasers and being more aggressive buying on deal and cherry picking the best sales by store.
Costco is expanding in United states, with its CEO expecting significant growth in next years. We expect a significant growth for Costco in year 2008. Costco is a good buy, but not at its current price.We recommend buyers to wait till the prices fall down to $58. Costco will see a target price of $75 by the end of the year or after the commodity prices ave stabilized.
Costco Wholesale Corporation (Costco) operates membership warehouses based on the concept that offering its members very low prices on a limited selection of nationally branded and selected private-label products in a range of merchandise categories will produce high sales volumes and rapid inventory turnover. It buys the majority of its merchandise directly from manufacturers and route it to a cross-docking consolidation point (depot) or directly to its warehouses. More from Reuters
Costco saw a significant growth in the first quarter of 2008 and its first quarter same store growth was 7 percent which was greater than estimated..(source CNN) Also with the slowing economy and increasing commodity prices, consumers are cutting on there spending. What we are witnessing now, is that consumers are eating out less and spending more at the Grocery stores. The major beneficiaries are the club stores (Costco (COST), BJ's (BJ), Sam's), low-end discounters (Wal-mart (WMT)) and some price competitive grocery stores (Super Valu (SVU), Safeway (SWY), Kroger (KR)). Club store same sales have jumped with Costco reporting same sales growth of +7% while BJ's has delivered its strongest numbers in years. Walmart has just reported increased guidance based on increased store traffic and larger sales $ per customer shopping trip. Consumers are clearly seeking better value for their food purchasers and being more aggressive buying on deal and cherry picking the best sales by store.
Costco is expanding in United states, with its CEO expecting significant growth in next years. We expect a significant growth for Costco in year 2008. Costco is a good buy, but not at its current price.We recommend buyers to wait till the prices fall down to $58. Costco will see a target price of $75 by the end of the year or after the commodity prices ave stabilized.
Comments
Post a Comment