Costco is updated and rated Weak Sell at $162.08. It is clearly a fantastic company. It’s the best in class for warehouse style stores. No retailer relishes competing with Costco. But it is trading at 30 times trailing earnings and the growth is good but not fantastic. I could rate it an outright Sell. But I have respect for its strong business and the fact that it could do things to push up the share price such as increase the dividend or use more debt to leverage and increase earnings per share. It could probably also easily expand more aggressively internationally if it wanted to. So, it will likely do okay in the long term but I would not be a buyer at this time and would likely Sell if I held it to raise cash or move into more compelling investments.
I had rated it a Sell on July 31 at $167.22 and it subsequently got as low as $142 on Friday, November 4. I mentioned then that I would consider buying a small amount at that price. I did not do so, perhaps because it started rising on Monday November 7. It is now apparent that the dip in the market at that time was a buying opportunity for many stocks. A good strategy for those with a lot of cash would be to have “stink bids” in at material discounts (15%?) to current prices on a number of good companies and just let the bid sit there for the maximum allowed 90 days and hope to pick up some stocks on dips. The danger is the dip would deepen after the purchase. But dips tend to be recovered from in the case of “good” companies.