Costco Wholesale Corporation (COST)

Very strong business in North America. Offshore business units not as strong. Inflation will attract new consumers. Execution of business very good. 40x P/E ratio very high. Would wait to buy on weakness. 

Up 44% this year, 4.5% today. Nobody does it better than them in retail. Last night they reported an amazing quarter: 7% increase in cardholders, member fee income up 8.2%, enjoying lower freight costs and will pay a special one-time dividend to shareholders. Plus, they're controlling shoplifting. One to own forever.

They report Thursday. He wants to hear what they say about the impact of inflation on consumer demand. This has had a good run this year. Don't trade it in and out. Doesn't have a problem with theft, like other retailers.

Both. Buy them 50/50. Costco is about their memberships, and TJX is the best off-price retailer around.

Leans towards AMZN, based on it having retail but also AWS. AI investments should help both AWS and retail customers. More compound potential because of different business streams.

COST has been well developed, but not sure how much more juice there is.

Terrific business. He's also been watching and waiting. Always trades at a high multiple, around 30x earnings. Unique business model with memberships, not a traditional retailer. Strong recently, because it's one of the few ways for consumers to save money. Stock weakness might occur if interest rates ease.

They have a net-leverage ratio (more cash than debt). It's one of the few retailers doing fine. They control theft well. They have so much cash, he thinks there could be a special dividend coming.

It enjoy economies of scale and strong price momentum.

Just delivered another solid quarter, traffic up 5.2%, memmbershio renewals also high.

Reported a strong quarter yesterday: little theft, beating same-store sales, overall sales, earnings and membership count. It rallied 2% today, up 23% this year.

It reports tomorrow. Everyone is questioning the consumer so she will be watching for ongoing subscriber growth. COST could benefit from richer households trading down in their shopping.

Their Kirkland brand is cheaper and better than premium brands. Astonishing. This saves Club Members money. The brand gives a leg up vs. other retail competitors in a tough retail landscape.

Their club system is terrific, with a high renewal rate. They innovate their products and maintain their margins. Lots of room to open new stores, even in North America. The best brick-and-mortar retailer.

Many growth levers. Membership growing quickly, motivated by inflation costs, and this will continue. Brand loyalty. New stores opening annually will support growth and the stock price. Long-term hold. Fantastic management.

A struggle to choose. He owns WMT. You get more defensiveness with the lower prices, as well as online exposure where WMT has made significant investments. 

COST has always had an expensive valuation, and always will. Selloffs are traditionally a good time to buy. Great assets and business model. There are a lot worse things to own than this one.