Costco Wholesale (COST) Flagged As Today's Pre-Market Laggard

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.

Trade-Ideas LLC identified Costco Wholesale ( COST) as a pre-market laggard 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 $285.7 million.
  • COST traded 12,541 shares today in the pre-market hours as of 8:13 AM.
  • COST is down 2.3% today from yesterday's close.

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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 1.1%. COST has a PE ratio of 28. Currently there are 12 analysts that rate Costco Wholesale a buy, no analysts rate it a sell, and 9 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 $63.2 billion and is part of the services sector and retail industry. The stock has a beta of 0.75 and a short float of 1.2% with 2.76 days to cover. Shares are up 1.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com 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, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.8%. Since the same quarter one year prior, revenues slightly increased by 4.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • COSTCO WHOLESALE CORP has improved earnings per share by 28.6% 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 ($5.22 versus $4.66).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food & Staples Retailing industry. The net income increased by 29.1% when compared to the same quarter one year prior, rising from $463.00 million to $598.00 million.
  • Net operating cash flow has increased to $900.00 million or 26.22% when compared to the same quarter last year. In addition, COSTCO WHOLESALE CORP has also vastly surpassed the industry average cash flow growth rate of -24.81%.
  • Powered by its strong earnings growth of 28.57% and other important driving factors, this stock has surged by 25.68% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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