NEW YORK (Real Money) -- Successful investing requires making assumptions: 12-month targets work off of expected earnings multiplied by an analyst's view of what price to earnings ratios those shares will command in the future.

Few companies have been as reliable as Costco(COST) - Get Report when it comes to long-term, if unspectacular, sales and earnings growth. Its membership fee-based business model has been compounding revenue at about 8.5% and EPS at around 10% annually over the past decade.

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The company's story is well known and much appreciated by the investing public. Costco has averaged a 22-times multiple since 2007, a period that spanned both good and bad economic times. It typically offered a yield of around 1.15% over those eight years, excluding special dividends ($7 and $5) paid in 2012 and 2015.

Traders who failed to lock in gains when the shares got relatively expensive in the middle of 2008 ended up needing to wait around two and a half years for the firm's fundamentals to catch up to the share price.

Value-oriented shoppers caught COST at much lower valuations on dips during subsequent years, right through early 2014.

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Full-year (FY) 2015 and 2016 estimates (FY 2015 ends Aug. 30, 2015) have been ratcheted upwards to $5.25 and $5.71 respectively.

What is a reasonable 12-month target price for Costco? A regression back to a more typical 23 times next year's projection would only support a $131 quote. For COST to yield its typical 1.15%, the price would need to drop down to $135.80 even if you budget for a 10% boost in the quarterly rate.

That doesn't bode well for buyers near the April 2, 2015, close of $151.63. It also makes for confusing opinions from analysts at Standard & Poors. They want to like the shares, but can only justify their modest upside by presuming a well-above normal P/E. At the same time, S&P's quantitative evaluation for COST suggests about 16% of downside risk.

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Research outfit Morningstar is less emotional and unequivocal, rating Costco as a two-star (out of five) Sell. That makes sense on an almost $152 stock with a fair value estimate of $137.

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Nothing is impossible in the stock market. Expensive stocks sometimes get even pricier. Betting that this time is different, however, usually proves to be a costly mistake.

Costco's insiders seem to agree. They had sold more than $27 million of shares year to date through April 1, 2015.

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The last open market buy by an official insider cam on Sept. 13, 2006.

Editor's Note: This article was originally published at 9 a.m. EDT on Real Money Pro on April 7.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.