Costco Wholesale Corporation - COST

Stock Discussions
13

I never really see Amazon as cheap, I see them as convenience. The main benefits being:

  • Quick delivery
  • Ease of finding anything on a single site

When I’ve bought something like a garlic crusher on Amazon, it’s been about twice the price of the same item in a physical store, but I buy it on Amazon for the convenience.

14

Fantastic stock with a great history and strong dividends. Glad this is in the works to be added !!! :grin: :stuck_out_tongue_winking_eye:

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15

This stock outperforms the s&p 500. We need this now!

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17

It’s one of the 250 new US stocks we’ll add very soon.

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20

Is there any update on the date for the stocks? I don’t really want to split between multiple brokers!

21

Has a date been mentioned for when these stocks will be added?

22

I actually just bought it in T212

23

Is this too expensive now?

It looks like the lockdown in the US didn’t massively impact the stock.

24

You have to evaluate that, of course.

I’ve been researching the company, and I didn’t understand it as well as I should have. Now I’m thinking what’s the right entry point, but these are the most surprising aspects of the company I learnt:

  • Focus. A large supermarket can have over 30,000 shopkeeping units (SKUs), but Costco has only 3,700 now. It focuses its buying power and gets better prices from suppliers as a results, and savings can be passed on to the customers.
  • It offers an IRL freemium / subscription service. Costco operates warehouses, and only members can shop. In the US, the yearly membership starts at $60. Executive membership costs $120 / year, and it gives you an extra 2% off your shopping. Executive members tend to spend more and make up just under 39% of members. That reminded me a bit of Amazon Prime.
  • Not really an e-commerce company. It’s started selling over the internet, and It does same-day delivery to US customers who live within a 20-minute drive of its warehouses, but internet sales still account for only 4% of annual revenues.

The most meaningful data for me is the growth of the memberships:
image
(source)

While the lack of e-commerce is something I dislike, this remains an interesting company on my watchlist.

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25

Thank you Conor , for your research. How do you go back researching a company /sector.

Thanks again
Lee

26

Anyone got any Costco shares? I’m considering buying some but thinking I might try and wait for a better entry point. Any thoughts on whether it’s worth just diving in or should I wait?

27

I have held Costco for a few years. This writeup probably convinced me - I like the model Amazon-Prime-like membership and loyalty. I think that stock price movements are more or less random to the average retail investor like me, so I don’t really have a view on entry points.

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28

I personally have a membership and love it, it just seems to be up a bit at the moment and I’m thinking it might be worth hanging on for a better entry point.

29

Costco have incredible membership loyalty and have managed to find the price point where it’s as much an IQ test as it is a decision.

I don’t however like how much the stock has been riding up of late. Simply Wall Street have it slight under valued by ~15% but I don’t like the P/E of 41.

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30

Thanks Neil, I would be more comfortable with it being in the £400’s just sitting slightly too high for me, wish I had invested sooner! Only hope is it comes down at some point.

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31

I’ve found a few comaknies over the years that I wanted to buy but just couldn’t justify the price. It’s a shame but paying for steak and getting a kebab isn’t good your pocket!

The sector has to work against the ongoing supply chain issues and 7%+ inflation. If they get it right they could justify their valuation but if not it’ll tumble back down to the $400’s quickly

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32

Yes completely agree! Thanks for the guidance, think I’ve made up my mind to wait, good chance it might drop a a bit and that’s when I’ll pounce!

33

I think we’re signing for the same hymn sheet. Back at $400ish is probably worth a serious look.

I often wonder if I should log the investments I don’t make and see if there is anything instructive - did I get it right or wrong and what can I learn form the decisions .

3 Likes
34

I almost bought ITM power at it’s high of over £5 but decided not to buy and then the drop came and I got the shares at £2.50. So glad I waited but it’s that whole FOMO, you think should I just go for it! Patience is a virtue as they say.

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35

Down a little in afermarket…

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