New Lifetime High Reached: Costco Wholesale (COST)

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 ( COST) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Costco Wholesale 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 $248.3 million.
  • COST has traded 132,161 shares today.
  • COST is trading at a new lifetime high.

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More details on COST:

Costco Wholesale Corporation, together with its subsidiaries, operates 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%. COST has a PE ratio of 30.8. Currently there are 12 analysts that rate Costco Wholesale a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Costco Wholesale has been 2.0 million shares per day over the past 30 days. Costco Wholesale has a market cap of $62.7 billion and is part of the services sector and retail industry. The stock has a beta of 0.79 and a short float of 0.8% with 2.12 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. Analysis:

TheStreet Quant Ratings rates Costco Wholesale as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase 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.

Highlights from the ratings report include:
  • COST's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • COSTCO WHOLESALE CORP has improved earnings per share by 12.9% 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 $4.66 versus $4.63 in the prior year. This year, the market expects an improvement in earnings ($5.15 versus $4.66).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Food & Staples Retailing industry average. The net income increased by 13.0% when compared to the same quarter one year prior, going from $617.00 million to $697.00 million.
  • 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.
  • Net operating cash flow has increased to $842.00 million or 49.55% when compared to the same quarter last year. Despite an increase in cash flow, COSTCO WHOLESALE CORP's average is still marginally south of the industry average growth rate of 51.04%.


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