Costco Wholesale Corporation (COST): Today's Featured Services Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Costco Wholesale Corporation ( COST) pushed the Services sector lower today making it today's featured Services laggard. The sector as a whole closed the day up 1.2%. By the end of trading, Costco Wholesale Corporation fell $1.30 (-1.3%) to $97.13 on average volume. Throughout the day, 2.9 million shares of Costco Wholesale Corporation exchanged hands as compared to its average daily volume of 2.1 million shares. The stock ranged in price between $97.13-$98.80 after having opened the day at $98.59 as compared to the previous trading day's close of $98.43. Other companies within the Services sector that declined today were: Staar Surgical ( STAA), down 18%, Atlas Air Worldwide Holdings ( AAWW), down 17.2%, Greenbrier Companies ( GBX), down 16.8%, and Zumiez ( ZUMZ), down 16.6%.
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Costco Wholesale Corporation operates membership warehouses that offer a selection of branded and private label products in a range of merchandise categories in no-frills, self-service warehouse facilities. Costco Wholesale Corporation has a market cap of $41.92 billion and is part of the retail industry. The company has a P/E ratio of 24.9, above the S&P 500 P/E ratio of 17.7. Shares are up 16.3% year to date as of the close of trading on Wednesday. Currently there are 12 analysts that rate Costco Wholesale Corporation a buy, two analysts rate it a sell, and seven rate it a hold.

TheStreet Ratings rates Costco Wholesale Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

On the positive front, China HGS Real Estate ( HGSH), up 146.4%, Newport Corporation ( NEWP), up 16.8%, Daily Journal Corporation ( DJCO), up 13.6%, and Lawson Products ( LAWS), up 12.5%, were all gainers within the services sector with Home Depot ( HD) being today's featured services sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the services sector could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the services sector could consider ProShares Ultra Short Consumer Sers ( SCC).

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