Is Costco Wholesale Corporation (COST) A Good Stock To Buy?

Judging by the fact that Costco Wholesale Corporation (NASDAQ:COST) has experienced a declination in interest from the smart money, it’s safe to say that there is a sect of funds that elected to cut their full holdings heading into Q4. Intriguingly, Matthew Tewksbury’s Stevens Capital Management sold off the biggest stake of the 700 funds tracked by Insider Monkey, comprising close to $15.5 million in stock. Peter Muller’s fund, PDT Partners, also cut its stock, about $11.2 million worth of shares. These moves are important to note, as total hedge fund interest dropped by 6 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Costco Wholesale Corporation (NASDAQ:COST) but similarly valued. We will take a look at Priceline.com Inc (NASDAQ:PCLN), Barclays PLC (ADR) (NYSE:BCS), Rio Tinto plc (ADR) (NYSE:RIO), and Morgan Stanley (NYSE:MS). All of these stocks’ market caps are similar to Costco Wholesale Corporation (NASDAQ:COST)’s market cap.

As you can see, these stocks had an average of 44 hedge funds with bullish positions and the average amount invested in these stocks was $2.49 billion. That figure was $1.78 billion in Costco Wholesale Corporation (NASDAQ:COST)’s case. Priceline.com Inc (NASDAQ:PCLN) is the most popular stock in this table. On the other hand, Barclays PLC (ADR) (NYSE:BCS) is the least popular one with only 15 bullish hedge fund positions. Costco Wholesale Corporation (NASDAQ:COST) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Priceline.com Inc (NASDAQ:PCLN) might be a better candidate to consider a long position.