Costco Wholesale (COST) Showing Signs Of Being A Momo Momentum Stock
Trade-Ideas LLC identified
(
) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Costco Wholesale as such a stock due to the following factors:
- COST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $346.7 million.
- COST has a PE ratio of 3.
- COST is currently in the upper 30% of its 1-year range.
- COST is in the upper 25% of its 20-day range.
- COST is in the upper 35% of its 5-day range.
- COST is currently trading above yesterday's high.
- COST has experienced a gap between today's open and yesterday's close of 0.8%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on COST:
Costco Wholesale Corporation, together with its subsidiaries, operates membership warehouses. The company offers branded and private-label products in a range of merchandise categories. The stock currently has a dividend yield of 1%. COST has a PE ratio of 3. Currently there are 13 analysts that rate Costco Wholesale a buy, no analysts rate it a sell, and 8 rate it a hold.
The average volume for Costco Wholesale has been 2.1 million shares per day over the past 30 days. Costco Wholesale has a market cap of $70.5 billion and is part of the services sector and retail industry. The stock has a beta of 0.79 and a short float of 1.3% with 2.75 days to cover. Shares are up 14.9% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Costco Wholesale as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- COST's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 0.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- COSTCO WHOLESALE CORP has improved earnings per share by 9.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COSTCO WHOLESALE CORP increased its bottom line by earning $5.37 versus $4.66 in the prior year. This year, the market expects an improvement in earnings ($5.65 versus $5.37).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food & Staples Retailing industry. The net income increased by 10.0% when compared to the same quarter one year prior, going from $697.00 million to $767.00 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Food & Staples Retailing industry and the overall market, COSTCO WHOLESALE CORP's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has increased to $1,028.00 million or 22.09% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.80%.
- You can view the full Costco Wholesale Ratings Report.
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