I will be traveling in the U.K. for two weeks starting Sunday and so my posts will be less frequent. Particularly next week I may have limited ability to connect to the internet.
This morning the markets are relatively flat overall.
Costco is up about 4% after releasing earnings. I notice that Yahoo Finance is having trouble with the math as it keeps flashing between 4.1% and closer to 6% on my screen (perhaps confusing the dollars and the percent). Yahoo is a company that has most definitely not been “on it’s game” for years. Yahoo finance often refuses to load properly for me until I hit refresh. Occasionally it has data that is plainly wrong. When a web portal company that has been around for over 20 years can’t seem to make its web site work consistently, that is pretty poor. There are rumors that Warren Buffett will back a buyout of Yahoo. If so, expect Berkshire’s financing to be in the form of high rate preferred shares where Berkshire gets paid ahead of the equity partners.
Getting back to Costco, last evening headlines were showing several negative stories including this one about poor same-store sales. The U.S. same-store sales were down simply because of low gasoline prices. And same-store sales from Canada and international were hurt by the higher U.S. dollar and lower gasoline prices. The underlying volumes at Costco however are still increasing at about 3%. On top of that it is opening new stores at a modest pace. The bottom line is that Costco continues to be a fantastic business but its share price seems expensive in relation to earnings. It has had occasional dips that have been buying opportunities although it never gets really cheap looking.
Statistics Canada reported today that Canadian corporate profits were down in Q1. As is always the case there are always some companies doing far better than others.