Trade-Ideas: Costco Wholesale Corporation (COST) Is Today's New Lifetime High Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Costco Wholesale Corporation ( COST) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Costco Wholesale Corporation 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 $165.2 million.
  • COST has traded 1.1 million shares today.
  • COST is trading at a new lifetime high.

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More details on COST:

Costco Wholesale Corporation engages in the operation of membership warehouses. The company offers branded and private-label products in a range of merchandise categories. The stock currently has a dividend yield of 1.1%. COST has a PE ratio of 25.6. Currently there are 12 analysts that rate Costco Wholesale Corporation a buy, 2 analysts rate it a sell, and 8 rate it a hold.

The average volume for Costco Wholesale Corporation has been 1.7 million shares per day over the past 30 days. Costco Wholesale has a market cap of $51.6 billion and is part of the services sector and retail industry. The stock has a beta of 0.46 and a short float of 1.3% with 4.14 days to cover. Shares are up 19.6% year to date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant 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, good cash flow from operations and increase in stock price during the past year. We feel these 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 3.4%. Since the same quarter one year prior, revenues slightly increased by 7.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • COSTCO WHOLESALE CORP has improved earnings per share by 18.2% 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 $3.90 versus $3.31 in the prior year. This year, the market expects an improvement in earnings ($4.56 versus $3.90).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Food & Staples Retailing industry average. The net income increased by 18.9% when compared to the same quarter one year prior, going from $386.00 million to $459.00 million.
  • Net operating cash flow has increased to $1,349.00 million or 24.56% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -9.46%.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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