Costco Wholesale Corp (COST)

Too expensive. High P/E. High PEG. Low dividend. Good company? Yup. Good stock price? Nope.

Gap down to 51

Rise too steep to maintain.

S&P 500 will continue to make gains while COST will languish as investors will move into stocks/funds that have a stronger upside. COST is too defensive- follow the herd mentality will only hurt this stock in the short term. A larger that expected increase in the unemployment rate might bring investors back to COST but inflation is expected to gain momentum and further drive investors to chase greater returns.

labor problems, probably traceable to union influences.

this stock is still trading at a premium in a down market. I think its over bought because of the huge success they have had in the past years. instrinsic value of 31.00 trading at 45.00. lets watch and see!

This stock is overpriced at P/E multiple of 17 and selling at more than twice of book value of 21.01. Based on the fundamentals, it should be worth less than its competitor Walmart, as its gross profit margin is a meager 12%, which compares poorly with WMT's 24%. This company's profit margin has been consistently low around 12% for the past five years, which speaks loud and clear to its inefficiency at generating income. Then look at how much Selling/General/Administrative Expenses took out of its gross profit: a staggering 78%!! And this company only pays a measly 1.37% dividend to its shareholders. Avoid this overpriced stock.

Everyone piled into this stock on the theory that people will trade down during the recession and buy cheaper/in bulk. Right now it's trading with a forward P/E of 17. The fact is that Costco is a simple retailer similar to Walmart and doesn't deserve to be selling for 17x forward earnings. As we come out of the recession you should expect people to also come out of the "trade down" stocks and Costco will underperform the market over the next 2 years.

Seems like a major discount warehouse retailer should be doing better in these tough times

here we are in a new economy - within a deleveraging landscape. these companies are the biggest & baddest that have beaten the S&P 500, however, upon closer look these companies valuations appear too high, future growth is constricted by debt levels, and already have pretty high institutional ownership for its size.
this stock will not double in the next 5 years...but if it does, thats bcuz most of the other stocks in your portfolio have tripled or done much better during that time frame.
SHORT PG, COST, WMT

I like the idea in a down economy consumers buy in bulk to save on name brand groceries, but the stock price is overvalued in my opinion. On a discounted cash flow basis at moderate growth levels this is a $25-30 a share based on its free cash flow history.

View my blog post for my reasoning.
http://www.investingandwealth.com/72/costco-wholesale-stock-valuation

Costco is a fine company that is positioned to outperform their top competiors. However the entire retail segment is going to continue to see pullback and reduced coustomer counts. I am also very curious to see both their new and returning 2009 membership numbers.

I was hoping Costco would share in Wal-Marts stregnth during weak times, however so far hasn't worked out. Over the year it has, so hopefully I'll start getting some points on this one, as the market falls some more

consumers will be more cost conscious, but COST could suffer from fewer luxury item sales.

COSTCO ISN'T EVERYTHING IT SET BE. FOR INSTANCE, HIGHER PRICES THAN YOUR Average grocery store. Their executive membership, they are giving money away, and that causes the price hike on their merchandise. Their gas is 2% water on every tank you buy. Most of the time their merchandise spoils in the next couple of days, and where's the bargain on that. Wake up world, Costco has you brained washed. I expect to see stocks to go down shortly, like everything else. Sell while its high.

Right company, wrong price

REPORTED EARNINGS THAT TOPPED EXPECTATIONS

Minimum wage increases over the next couple years along with rising food and transportation costs will cut profits across the board