Costco Wholesale Corporation (COST)

Is one of the greatest businesses on Earth. Customer satisfaction is off the chart, but at 50x PE the stock is too expensive. Not worth holding for 2 years, but 20 years, yes.

Secret sauce is ongoing ability to surprise and delight customers. Still likes, still holds.

Results were excellent, double-digit growth, yet pulled back along with others in 2025. You have to look at the chart -- stock's tripled since the pandemic. Could be the pause that refreshes. 

Very excited about it as long as it keeps on growing, and he sees no reason for it not to. Trades at a high valuation, but one of the most durable business models he's ever seen. It can add 30-35 stores a year for 20-30+ years. Membership can grow because it offers such good value. He adds on material pullbacks, such as drop to mid-$800 level.

Has long owned this. It's trading at a high 50x PE, above historic highs, but their numbers are coming through. The stock is bouncing. Stay long. He still likes it.

He partially sold his holding. Technical analyst Larry Williams says that COST is now undervalued. COST's long-term cycle peaked in early 2025 and has sunk since then. His cycle forecast predicts COST to rally again, a screaming buy. His short-term cycle research expects COST to rally into late February then pull back, then rally in June. It was just upgraded today on strength in its core business, but most stocks rallied today. 

Weaker because in the current investor environment, no one cares about buying tissue by the palette. Extremely well managed. Long runway of growth. Problem is (and has always been) valuation. Do you want to pay 50x PE for 10% annual growth?

If there were another 10% or so pullback, he'd definitely be interested. This company is extremely durable; rain or shine, they take more market share. Around $730-750, he'd definitely be a buyer.

Still one of the most consistent businesses in global retail. Hard-to-replicate membership model is the core driver of loyalty, recurring revenue, and steady traffic. Even with tougher consumer backdrop, still continues to gain market share. Predictable cashflow and long-term compounding through cycles. 

Pullback provides a good entry point. Trades at 50x forward PE, but that reflects durability and reliability. Sees over 20% growth upside from here. Ranks 10/10 on fundamentals. Yield is 0.6%.

He and his family have renewed their Costco membership. It's an amazing business. Has been watching it a long time. The valuation is far too rich. As Charlie Munger said, let it compound wealth. Costco continues to open warehouses while their Kirkland Brand remains massive. If you own, continue to hold even through sideways periods.

The stock got too high. He had to sell half his position. Is concerned with the memberships renewals and may sell the rest.

They make a lot of money primarily from his wife and mother-in-law, but also from about 80 million other members ;)  Likes it, in his momentum mandate. Likes visibility and stickiness of membership revenue. Once people pay the membership, they become loyal shoppers. Pretty robust new-store expansion, even though it's been around for 4 decades. Margins are good and stable. Doing more and more in e-commerce.

Perennial knock against it is the valuation. Always expensive. Any day that ends in "y" is a good day to own, all the better with recent pullback. His firm is long and strong this one.

If you separate the valuation of COST and the business of COST, there aren't too many businesses that are better. Phenomenal business because it creates so much value for its customers, especially in these times of inflation. As for growth potential, still expanding into new markets, so really good growth profile.

Valuation becomes the sticking point. Trading at 40x PE, too rich for the cashflow. Doesn't think it'll get down to 30x PE, but perhaps 35x. For investment success in any stock, you really need to get earnings growth and multiple expansion. Those are the twin engines of your compounding. If you get earnings growth but it's less than expected, the multiple can contract and your gain is zero. Watch and wait on this one.

Personal investing rules are good. COST has always been too expensive. He doesn't know their PE, but likely well in the 40s. It was long above 50,

It's back to April's lows. Is a quality company. They have a wide moat. Can hold long term, but the sector is not great now. Is up 135% over the past 5 years. But it would fall to $850--still wouldn't sell.

(Note the short timeframe.)  Pulled back from February highs, but she still really likes it. Stock has some support at this level. Almost double from a couple of years ago. Shoppers are loyal. Sales are growing faster than WMT and TGT. Digital commerce finally becoming a real contributor. Growth story remains intact. Sees almost 20% upside from here. Fundamentally 10/10.

He has yet to find a better business model in retail. Uses scale to secure low prices, which they pass along to consumers. Sales of Kirkland brand are twice that of KO. US is 3/4 of the business, 900 stores worldwide, opening more.

Always too expensive, but has pulled back in last little while. Getting close to 30x forward PE, so starting to pique his interest.