Costco Still Looks Like the Leader

The allure of buying in bulk has kept sales and profits afloat at warehouse clubs. But how long will investors keep buying these stocks?

Both Costco (COST Quote) and BJ's Wholesale Clubs (BJ Quote) reported rising profits Tuesday, providing more evidence that deep discounting -- even if it means buying the gallon-sized mayonnaise -- is the way to consumers' hearts.

But investors' penchant for concentrating their money on the leaders in various retail subsectors has created some highly valued stocks, worrying some observers that the upside for some big retail names is limited. Early afternoon Tuesday, shares in Costco were down 54 cents at $40.45, while BJ's stock was up 49 cents at $42.39. ...