Costco (COST) - Get Report didn’t have a bad fiscal first quarter, but the membership-based retailer's report in mid-December didn't feature the fireworks investors needed to immediately bid the stock to new highs.
Since December, however, the stock has been on a roll and is now trading near its all-time high.
The Action Alerts PLUS team initiated a position in Costco in January as the portfolio wanted to buy stocks amid marketwide fears about the coronavirus but also sought companies with limited exposure to China.
“We always like to buy quality whenever there was an indiscriminate selloff like we had that day. And I can't think of a higher-quality retailer than Costco,” said Jeff Marks, senior analyst at Action Alerts PLUS, on the exclusive monthly call for AAP members.
“It is the best,” Action Alerts PLUS Portfolio Manager Jim Cramer agreed. “Remember, everybody, it's a club and the real money is made on their club card. And what I would say is not unlike Amazon (AMZN) - Get Report, not unlike Netflix (NFLX) - Get Report, they have a card that they could charge a lot more for and people would still keep coming.”
The average Costco store has more than 60,000 members, but the Issaquah, Wash., chain's lone location in Shanghai has more than 100,000 members. And that number could double in the next few years.
Check out the video above to hear what the AAP team has to say about Costco.
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