We recently published a list of Jim Cramer’s Latest Calls: Top 10 Stocks. Since Costco Wholesale Corporation (NASDAQ:COST) ranks 5th on the list, it deserves a deeper look.
Jim Cramer in a latest program said that if companies would “own up” to the changing circumstances, things would be “so much easier” for them as well as investors.
“There is so much information and misinformation flying around at this point in the earnings season that it’s very easy to be led astray,” Cramer said.
Cramer thinks companies are “leaving out” important information which can cause investors to make “faulty decisions.”
As an example, Cramer talked about how food and beverage companies are not talking about the impact of weight loss drugs on their financials
Cramer said that GLP-1 drugs are extremely “powerful” and they cause a decline in cravings for snacks and liquor. This, according to Cramer, directly affects beverage and snack companies. However, Cramer said these companies are intentionally not mentioning the impact of these drugs.
“I wonder how long they can maintain this fiction, it’ll be better if they just own that it’s a problem rather than just ignoring it.”
Cramer was also furious that consumer companies are not admitting that high prices are impacting their financials. He said hotels and entertainment companies raised prices in the past but now they are not willing to bring them down despite facing pricing headwinds.
Cramer also called the claims that huge AI investments are not bringing any solid results for companies “absurd.”
We watched several latest programs of Jim Cramer on CNBC and picked 10 important stocks he’s talking about. With each stock we have mentioned the number of hedge fund investors. 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).
Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Investors: 65
Jim Cramer yet again hit the “buy, buy, buy” button on Costco in a latest program, praising the company’s “unbelievable bargains.”
Costco recently reported a 7.4% increase in monthly net sales for June to $24.48 billion, compared to $22.78 billion in the prior year. Analysts believe the latest membership fee hike won’t impact Costco Wholesale Corporation (NASDAQ:COST) negatively amid a loyal customer base. Costco has over 74.5 million paying memberships and a renewal rate of 90.5% In May the company posted fiscal third quarter results. Despite massive inflation, the company’s results were upbeat as it beat estimates on both revenue and EPS. Costco Wholesale Corporation (NASDAQ:COST) saw a 6.1% increase in comparable foot traffic, while maintaining a remarkably low shrink rate of under 0.2%, which is one-tenth of the industry average. The value for money Costco Wholesale Corporation (NASDAQ:COST) offers is making customers flock to its executive membership, which costs almost double the regular membership. The company had 34.5 million paid executive memberships, an increase of 661,000 on a sequential basis. Costco Wholesale Corporation (NASDAQ:COST) executive members now represent over 46% of paid members and 73.1% of worldwide sales.
As consumers continue to look for better prices and inflation is far from over, Costco is expected to keep growing. Costco Wholesale Corporation (NASDAQ:COST) is also a strong dividend payer, with about two decades of consistent dividend increases.
ClearBridge Sustainability Leaders Strategy stated the following regarding Costco Wholesale Corporation (NASDAQ:COST) in its Q2 2024 investor letter:
“Consumer staples holdings were also standouts in the quarter, such as Costco Wholesale Corporation (NASDAQ:COST), which continues to execute well and delivered better than expected earnings, helped by strong traffic driving better expense leverage. Customers also looked to be shifting toward more discretionary purchases.”
Overall, Costco Wholesale Corporation (NASDAQ:COST) ranks 5th on Insider Monkey’s list titled Jim Cramer’s Latest Calls: Top 10 Stocks. While we acknowledge the potential of Costco Wholesale Corporation (NASDAQ:COST), 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.
