We recently compiled a list of the Jim Cramer on Nvidia Plus Other Stocks. In this article, we are going to take a look at where Costco Wholesale Corporation (NASDAQ:COST) stands against the other stocks Jim Cramer was talking about.
Jim Cramer, host of Mad Money, recently observed that consumers are no longer focused on brand names but are instead prioritizing companies that offer the best value. Cramer noted that there is a noticeable shift happening in the market, saying:
“We’ve become a nation of cheapskates. I say that as a compliment. Nobody gets away with charging too much anymore, not in this country, no matter what industry, perhaps even the drug industry.”
He pointed out that this shift is happening rapidly, and many companies are being left behind as consumer behavior changes. Cramer said that he has observed this shift firsthand in various settings, including grocery stores, online, malls, and even the stock market.
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Cramer went on to explain that Americans are increasingly fed up with high prices. He said:
“The American people are tired of paying up. They feel gouged, they feel betrayed. They feel that the only thing about brand loyalty is that it isn’t worth a dime. They want a better deal. They’ll eagerly switch lifetime habits in order to save some money because prices are up so much that you feel like an idiot if you’re paying up.”
Reflecting on the market dynamics, Cramer shared his insights from Wednesday’s trading session. Cramer noted that the Dow gained 139 points, the S&P remained flat, and the Nasdaq dipped 0.11%, while the midday trading was much more challenging. He emphasized that the trend toward value is not confined to retail alone but is expanding into other sectors, including tech.
At the end, Cramer summed up the situation by saying:
“Prices have gotten so high over the past few years that we’re losing our loyalty to brands. These days, this whole country is about one thing: The Benjamins.”
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on November 20. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A customer in a warehouse aisles, browsing the wide range of branded and private-label products.
Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 75
Cramer highlighted how Costco Wholesale Corporation (NASDAQ:COST) has maintained an impressive deal over the years, saying:
“… There’s a reason why Costco has tens of millions of members… We’re loyal to the cause of low prices and Costco has instilled that loyalty in a very visible way… They can offer great deals because they carry a smaller selection of products. Enormous bulk gives them a lot of leverage.”
Costco (NASDAQ:COST) is a well-established membership-based warehouse retailer that offers a wide array of products, both branded and private-label. The company is known for its bulk sales model, which provides shoppers with significant value. For the fourth quarter of fiscal 2024, it reported an impressive 90.5% global renewal rate for memberships. Paid memberships rose by 7.3% year-over-year, reaching a total of 76.2 million.
A notable shift in the membership demographic has occurred since the pandemic, with a growing number of younger members. Management highlighted that half of the new signups in fiscal 2024 were individuals under 40, which presents a promising long-term growth opportunity as this demographic continues to shop at Costco.
In the fourth quarter of fiscal 2024, Costco (NASDAQ:COST) saw an increase in shopping frequency, with traffic rising by 6.4% worldwide and 5.6% in the U.S. Management also highlighted that the company’s mobile app was downloaded 3.5 million times during the quarter, which pushed the total number of downloads to around 39 million.
Overall COST ranks 4th on our list of the stocks Jim Cramer was talking about. While we acknowledge the potential of COST as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than COST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
