Based on the aggregated intelligence of 115,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, wholesale club retailer Costco (Nasdaq: COST) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.
With that in mind, let's take a closer look at Costco's business, and see what CAPS investors are saying about the stock right now.
Costco facts
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Headquarters
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Issaquah, Washington (since 1976)
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Market Cap
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$24.8 billion
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Industry
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Discount, Variety Stores
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TTM Revenue
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$70.3 billion
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Management
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Co-Founder/CEO James Sinegal
CFO Richard Galanti
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TTM Return on Equity
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12.83%
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Competitors
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Wal-Mart (NYSE: WMT),
Target (NYSE: TGT)
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CAPS members bullish on COST also bullish on
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Apple (Nasdaq: AAPL),
General Electric (NYSE: GE)
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CAPS members bearish on COST also bearish on
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Ford Motor (NYSE: F),
Google (Nasdaq: GOOG)
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Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.
Over on CAPS, fully 612 of 648 of the All-Star members who have rated Costco -- some 94% -- believe the stock will outperform the S&P 500 going forward. These All-Star bulls include Iziebarth and marc64, both of whom are ranked in the top 20% of our community.
In March, Iziebarth reminded our community that Costco "is a great company that is very generous to both consumers and its workers. It offers the lowest prices to customers by the way they deal with vendors."
A more recent pitch from marc64 in April shares that bullish feeling, highlighting the stock as a smart way to recession-proof your portfolio:
Costco is the new Wal-Mart, but aimed at a more affluent, yet parsimonious, customer base.
These customers are likely to do OK even in an economic downturn. The drum-beat has started: Consumer-friendly media suggesting consumers buy in bulk to save money in tough economic times, like at Costco. Makes sense more folk will decide that paying their dues, driving to one warehouse location, and standing in Costco's super long lines with a huge pile of stuff (when they thought they just came in to stock up on a year's worth of catchup) is ultimately worth it.
It is definitely good for Costco.
Costco will do well under any consumer drought.
What do you think about Costco, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 115,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.
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