Costco Wholesale Corporation (COST)

There's evidence of the consumer trading down, and they had a solid quarter. Shares are up 7% YTD. Has a concern of weakening in the lower-end consumer, though.

Attractive, but always too expensive given the growth rate. Trades at a 35x multiple. Business model is highly predictive, where 80-90% profit comes from membership fees. But this is priced into the stock. Once economy improves, expect a membership fee increase.

The stock has been sideways for several months, but the stock is resilient through past cycles, so he likes it. A retail you want if there's a recession.

He sold it in late January. It was trading at a high 33x and growth was slowing. Free cash flow margins were cut in half. They do have a loyal following, but they can't sustain price increases. He doesn't want to own big-box retail and prefers luxury.

He doesn't consider them big-box retail, because they have a unique brand. Can't see more competition coming besides Walmart. He'd loved to buy it when the PE declines, like to 25x. Incredible management.

SS sales are still up 5%, but they missed on large discretionary items which is consistent with Walmart. Member renewal rates are still over 90% globally though. Management's execution commands a premium multiple.

It reports Thursday. It has a bad habit of declining on any news, even good, and it will be worse because we're in a retail bear market. Strong stomachs can buy this if shares fall after the quarter.

Great company, but has always been expensive with a multiple in the low-mid 30s. Membership fees haven't been raised, and they don't want to shock the consumer during weak economic times. 

Remains above its 200-day moving average. Strong customer renewal rate. Pays only a 1% dividend, but great at selling a limited number of products. Customers buy bulk items. It's the only staples stock he owns, but likes this for its growth.