Purchase Guide

Costco: 3 Reasons to Buy, 1 Reason to Sell

BY HEMAJA BURUD TECHNOZIVE.COM

The retailer warehouse club is still a wise long-term investment.

Since the company went public in 1985, Costco (COST 0.88 percent) has weathered four significant US recessions.

Nevertheless the warehouse retailer's stock has still produced a cumulative return of over 74,500% since its 1985 IPO, making it one among the best stocks in the previous 40 years.

Reason #1 to purchase: Its enduring business strategy

Three fundamental components make up Costco's prescription for consistent growth.

Reason #3  to purchase: Stable operating margins

The U.S.'s recent 40-year high in inflation will probably have an immediate negative impact on Costco's gross margin.

1 justification for selling Costco is its valuation

Costco expects its fiscal 2022 revenue and profits per share to increase by 15% and 16%, respectively.

Still, the advantages exceed the disadvantages.

Although Costco stock isn't cheap, I think its high value is justified.

Prior economic downturns had little effect on its business, and it will probably come out of the current inflation cycle as a far stronger store.

Costco shares are currently available for purchase, but investors should prepare for significant short-term volatility and be ready to add more shares if the stock price continues to decline.

The basic operations of Costco are highly protected from macroeconomic fluctuations. The latest quarter saw record-high rates of membership renewal. the retailer's inventory appears pricey.

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