In this article, we discuss 5 best stocks to buy before the 2023 recession. If you want to see more stocks in this selection, check out 14 Best Stocks To Buy Before the 2023 Recession.
5. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 69
Costco Wholesale Corporation (NASDAQ:COST) operates membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. It is one of the best recession stocks to invest in. On January 5, Costco Wholesale Corporation (NASDAQ:COST) reported December sales of $23.80 billion, up 7% from $22.24 billion in the same period last year. The company also posted net sales of $82.16 billion for the 18 weeks ended January 1, 2023, compared to $76.34 billion a year ago.
On December 21, Tigress Financial analyst Ivan Feinseth maintained a Buy rating on Costco Wholesale Corporation (NASDAQ:COST) but trimmed the firm’s price target on the shares to $635 from $678, citing a re-rating of valuation. The analyst, who observed that his updated target reflects a potential total return with dividends of nearly 40% from present levels, sees the recent pullback in Costco Wholesale Corporation (NASDAQ:COST) shares as “a major buying opportunity” given the company’s loyal customer base and solid business model.
According to Insider Monkey’s data, 69 hedge funds were long Costco Wholesale Corporation (NASDAQ:COST) at the end of Q3 2022, compared to 64 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 2.5 million shares worth $1.20 billion.
Here is what Cooper Investors Global Equities Fund has to say about Costco Wholesale Corporation (NASDAQ:COST) in its Q3 2022 investor letter:
“The US economy continues to run hot – the labor market is extremely tight and a number of executives we spoke to described their challenges in retaining staff and preventing competitors from poaching talent. Industrial companies in particular continue to see record backlogs, with the easing of logistics and supply chain constraints only just starting to have an impact on deliveries and lead times.
In terms of inflationary pressures, the vast majority of our holdings have been able to leverage strong market positions and stakeholder relationships to push pricing through in 2022 such that minimal impact to earnings has occurred. Clearly this is not a lever that can be pulled indefinitely but the more experienced management teams have kept some of their powder dry. Our meeting with management at Costco in Seattle was memorable for several reasons but one was their latent ability to increase member pricing which they have not done in over 5 years (and thus likely to do in 2023)…
…To conclude we’ll return to our meeting with Costco mentioned earlier. The business quality is no secret after decades of incredible execution, but the meeting gave us renewed conviction around Value Latencies in terms of the runway for growth, the focus on enhancing customer value, Costco’s vast buying power (it purchases 30% of the world’s jumbo cashews as one example) and management’s feral focus on the business model and cost discipline.”
