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I like buying stocks cheap, and today I'm picking up a retail stock that caters to people of a similiar bent.

Costco Wholesale

(COST) - Get Costco Wholesale Corporation Report

offers low prices on selected national brands and private-label products in a wide range of merchandise.

The company operates about 500 self-service warehouses in seven countries and has approximately 48 million club members.

Costco is the leader in the club wholesaling market in terms of sales. The company stocks high-quality merchandise and maintains a low 15% markup policy. This has created customer loyalty -- Costco has an 87% membership renewal rate.

Low prices and generous employee compensation and benefits account for a very small operating margin, but Costco more than makes up for it in sales volume and inventory turnover -- Costco sells nearly 50% faster than wholesale rival Sam's Club, which is owned by


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Speedy turnover allows Costco to turn its inventory into cash before payments are due to suppliers, creating a very healthy balance sheet with plenty of cash. Analysts anticipate the company's operating margin will grow to 3% from 2.7%.

On Sept. 5, Costco reported August sales of $4.84 billion, a 6% increase from $4.56 billion in the same period last year; sales for the quarter were $20.06 billion, an increase of 3% from $19.50 billion in the fourth quarter 2006; sales for the fiscal year 2007 were $63.06 billion, an increase of 7% from $58.96 billion in fiscal year 2006.

Costco closed at $58.59 on Tuesday, setting this stock up for a solid deep-in-the-money call trade.

To take advantage of this opportunity, I will place a limit order to buy 10 April 47.50s (PRQDW) for $12.40 or better.

Now let's take the weekly review of the DITM Stat Book.

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At the time of publication, Dykstra had no positions in stocks mentioned.

Nicknamed 'Nails' for his tough style of play, Lenny is a former Major League Baseball player for the 1986 World Champions, New York Mets and the 1993 National League Champions, Philadelphia Phillies. A three time All-Star as a ballplayer, Lenny now serves as president for several privately held businesses in Southern California. He is the founder of The Players Club; it has been his desire to give back to the sport that gave him early successes in life by teaching athletes how to invest and protect their incomes. He currently manages his own portfolio and writes an investment strategy column for, and is featured regularly on CNBC and other cable news shows. Lenny was selected as OverTime Magazine's 2006-2007 "Entrepreneur of the Year."