Stock of the Day: Costco

The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.

The American shopper might be looking for bargains again. June same-store sales numbers came in below analyst expectations. And it looks like customers are becoming more and more cost-conscious. High-end retailers like Nordstrom and Limited Brands did put up big numbers in June, however, providing evidence that the high-end consumer is still spending. And discount retailers TJX Companies also turned in some strong gains. But when we get to retailers that serve the middle-class shopper, such as Target, the numbers came in a little bit low, suggesting those consumers are starting to pull back a bit. If David could only own one retailer, it would be Costco. Its customers average about $85,000 of household income. Its membership approach is a very strong business model, and it has a tremendous management team. This stock is worth buying on the dips.

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David Meier has no positions in the stocks mentioned above. John Reeves owns shares of Costco Wholesale. The Motley Fool owns shares of Costco Wholesale. Motley Fool newsletter services recommend Costco Wholesale. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Related Tickers

10/27/2016 3:08 PM
COST $150.75 Down -0.23 -0.15%
Costco Wholesale CAPS Rating: ****
JWN $52.75 Down -1.28 -2.37%
Nordstrom CAPS Rating: ****
LB $72.57 Down -0.20 -0.27%
L Brands CAPS Rating: ****
TGT $67.57 Down -1.02 -1.49%
Target CAPS Rating: ***
TJX $73.18 Down -0.91 -1.23%
The TJX Companies CAPS Rating: ****