We recently compiled a list of the Jim Cramer Says These 10 Stocks Can Do Well Regardless of Who Wins. In this article, we are going to take a look at where Costco Wholesale Corporation (NASDAQ:COST) stands against the other stocks in Jim Cramer’s current watchlist.
Jim Cramer, the host of Mad Money, recently shared his thoughts on stocks that could perform well regardless of who ends up running the White House. On Tuesday, Cramer observed that the day’s market performance gave the impression that every stock could go higher no matter who secures the presidency.
He pointed to significant gains across various sectors, including aerospace, housing, retail, and healthcare. Cramer noted that this broad-based rally resulted in strong performances on Tuesday, with the Dow climbing 427 points, the S&P rising by 1.23%, and the NASDAQ soaring by 1.43%. However, he tempered his optimism by adding that days like Tuesday might prove to be outliers in the coming weeks.
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Cramer took the opportunity to highlight ten stocks he believes will thrive and said:
“I want to highlight ten stocks that I believe will do well under either candidate, a who’s who of acclamation, companies that almost have to do well because of seismic trends and savvy managements. Companies that no White House would get hung up on, either because they’re beneath notice or they’re perceived as good corporate citizens by both sides. Stocks in industries that neither Trump nor Harris have ever targeted in the past.”
He also raised an important question for the viewers: “If you had the results of the election in hand, would you really know what to buy or sell?” According to Cramer, answering that question is far more complicated than it seems. He emphasized his list of stocks that can thrive regardless of the election outcome. These are companies that have no clear political adversaries in Washington, making them relatively safe bets. Cramer acknowledged, however, that many stocks that seem like obvious picks for one candidate or another often have hidden dynamics that don’t get enough attention.
“In the end, this presidential prognostication game is meaningless until we start hearing about cabinet appointments, those will tell us a lot. Then, we can figure out really who the winners and losers are. Right now, though, there are just too many political angles to every single stock story.”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money on November 5. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 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: 71
Cramer pointed out Costco Wholesale Corporation’s (NASDAQ:COST) business model and how it makes money.
“I like Costco… These retailers have done tremendous work pushing back against inflation by using their scale to push costs down then passing on the savings to you, the customer. Neither candidate can mess with that proposition… Costco’s got a business model where they make most of their money off the membership card. The model’s about getting as much volume as possible, not taking as much price as possible and that’s why everybody loves it. That and of course, the free samples… We love going down the aisles, just imagining how much more we’d have to pay at some other store…
All three of these retailers work. Even if President Trump installs high tariffs, none has any meaningful foreign exposure that can hurt them even as they all have overseas operations.”
Costco (NASDAQ:COST) operates membership-based warehouses, offering a wide range of branded and private-label products, as well as various services including gasoline, pharmacies, and online business delivery. Its membership model is a key component of its business, offering a consistent revenue stream that directly benefits the company’s profitability. This model has proven to be highly effective, with membership renewal rates consistently hovering around 90%.
The company’s success with this model is also evident in its continued expansion as it is one of the few large brick-and-mortar retailers still opening new stores. In fiscal 2024, which ended on September 1, the company opened 30 new warehouse locations, bringing the total number of warehouses to 890. Of these new openings, 23 were in the U.S., with the rest in international markets.
Additionally, Costco (NASDAQ:COST) management recently raised its membership fee, increasing the cost of a basic annual membership from $60 to $65. This fee adjustment comes as part of the company’s ongoing efforts to drive revenue and strengthen its business model.
Overall COST ranks 4th on Jim Cramer’s list of stocks that can do well regardless of who wins. 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.
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Disclosure: None. This article is originally published at Insider Monkey.