Costco Is Buying Its Stock: Should You Buy Too?

A closer look at the warehouse retailer's new share buyback plan.

Mar 14, 2014 at 11:19AM

As part of its earnings announcement last week, Costco (NASDAQ:COST) said that it plans to begin repurchasing its own shares this quarter. Should investors follow the warehouse retailer's lead?

In the video below, Fool contributor Demitrios Kalogeropoulos offers his take, arguing that Costco's stock repurchase plans are likely motivated by capital allocation concerns, and not necessarily because management views the stock as a bargain right now. Still, the stock is a bit less expensive than it was a few months back. And, thanks to its leadership position in the industry, Costco shares are hardly ever cheap. That's why investors who want to own the stock would be wise to buy opportunistically and build up a position over time, he contends.

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Demitrios Kalogeropoulos owns shares of Costco Wholesale. The Motley Fool recommends and owns shares of 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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