Gregmal Posted July 18, 2019 Share Posted July 18, 2019 Ive admired this for a long time but never owned it for the same reasons many here cite. However to play devils advocate, the concerns about "how can they justify the future valuation" or "where is the growth going to come from" are the same tried and true reasons Ive heard investors write off this and many, many other really great companies and investments. AMZN and ISRG are the first ones to come to mind, but there are plenty of others. Nevertheless these great companies keep finding ways to innovate and print money for shareholders. Also, there is a certain irony to people citing the above, mainly law of large numbers arguments, while many of those same likely load the boat on BRK....which faces the exact same issue to an even greater extent, but doesn't have the innovation these companies do. Link to comment Share on other sites More sharing options...
K2SO Posted July 18, 2019 Share Posted July 18, 2019 I've been waiting for the right valuation to buy this stock for almost 20 years. Link to comment Share on other sites More sharing options...
Gregmal Posted February 29, 2020 Share Posted February 29, 2020 Anyone eying this? Fits the mold of everything that is getting its shit pushed in right now. And exactly the type of business I finally want to be looking at picking up. $240-260 or so would be nice. 15-20x EBITDA or so but that may be optimistic. Link to comment Share on other sites More sharing options...
bizaro86 Posted February 29, 2020 Share Posted February 29, 2020 I'm still holding almost all of my COST, I did sell a touch just under $300. I paid ~25x earnings when I bought ~3 years ago, and that's worked out rather well. I'd be willing to add more at that valuation. Using the Seeking Alpha number for forward earnings that would be a buy price of $217. I though this post from a few years ago with peak/trough/average multiples was interesting. https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/costco-selloff/20/ Link to comment Share on other sites More sharing options...
gokou3 Posted February 29, 2020 Share Posted February 29, 2020 FWIW, many consumer staples (rice, hand sanitizers, flour, household cleaners) at the local Costco in Greater Vancouver are out of stock since the Canadian govt asks people to stock up on supplies a few days ago. There are videos of people lining up for the opening in the Richmond store where there is a high concentration of Chinese population. Could Costco be a beneficiary of the virus? Valuation is still quite high imo. Link to comment Share on other sites More sharing options...
Gregmal Posted February 29, 2020 Share Posted February 29, 2020 Its high, but "its high" has always been a reason to not purchase this wonderful company for me. As such, Im leaning towards making an exception to personal thought on valuations as previously thats been a losing strategy with this one. Rather, I think Ill just be hoping that the broader market is moderately efficient and that the sell off is whats inefficient, and at least grab a few shares soon. Maybe $275 or so on Monday assuming like 2-3 more people get corona in the US. Either way this is one of the companies I think people should be circling like a hawk. Link to comment Share on other sites More sharing options...
LC Posted February 29, 2020 Share Posted February 29, 2020 I was surprised to see this down 5% or so on Friday. I had gone to costco earlier in the day and it was flooded. Anecdotes here on COBF over the past few days have echoed the same. Link to comment Share on other sites More sharing options...
tradevestor Posted February 29, 2020 Share Posted February 29, 2020 Wouldn't this just be a relatively small, short term bump, since most of their earnings are from membership fees? Link to comment Share on other sites More sharing options...
bizaro86 Posted March 1, 2020 Share Posted March 1, 2020 Wouldn't this just be a relatively small, short term bump, since most of their earnings are from membership fees? The only thing I could see is maybe it has slowed down their Chinese expansion? The stock was up a lot when the first Shanghai store opened, so I think the market is discounting significant profits from China. If that ramp gets delayed a year the PV is less? Link to comment Share on other sites More sharing options...
bizaro86 Posted March 2, 2020 Share Posted March 2, 2020 This is a crazy market. COST up nearly 10% so far this morning. Link to comment Share on other sites More sharing options...
BG2008 Posted March 2, 2020 Share Posted March 2, 2020 Been seeing a lot of twitter feeds with these posts https://twitter.com/andrewyangstan/status/1233925788568674305 People literally saying that Cost will kill Q1 earnings. Link to comment Share on other sites More sharing options...
Aberhound Posted March 3, 2020 Share Posted March 3, 2020 FWIW, many consumer staples (rice, hand sanitizers, flour, household cleaners) at the local Costco in Greater Vancouver are out of stock since the Canadian govt asks people to stock up on supplies a few days ago. There are videos of people lining up for the opening in the Richmond store where there is a high concentration of Chinese population. Could Costco be a beneficiary of the virus? Valuation is still quite high imo. Won't Amazon benefit more from home shopping? You have to work out a system to decontaminate parcels. Costco shoppers currently seems to have a higher infection risk. Both companies will have supply chain problems. I wonder which is more resilient to those problems? I would guess Amazon due to the greater buying power. I think US will solve the problem so both will do well longer term while I suspect Costco will have excess profits short term due to this stocking then a drought due to the contagion risk and supply problems then profits again when the problem is fixed. So likely Costco will have a better buying opportunity say next fall's flu season. Perhaps Costco could sell some new remedies such as Brown's gas machines for breathing, water structuring units which produces highly ionized water, infared saunas UV 270 nm LED light units and infrared saunas. All increase cell voltage so the body heals and resists disease. Sick customers don't buy at Costco so why not keep them healthy? This type of thinking and initiative is why I think US will solve the problem. Link to comment Share on other sites More sharing options...
SlowAppreciation Posted March 3, 2020 Author Share Posted March 3, 2020 Wouldn't this just be a relatively small, short term bump, since most of their earnings are from membership fees? The only thing I could see is maybe it has slowed down their Chinese expansion? The stock was up a lot when the first Shanghai store opened, so I think the market is discounting significant profits from China. If that ramp gets delayed a year the PV is less? Doesn't seem like it considering this was announced 4 days ago: http://www.timeoutshanghai.com/features/Blog-Blog/72339/Costco-is-opening-its-second-Shanghai-store-in-Pudong.html Link to comment Share on other sites More sharing options...
merkhet Posted March 3, 2020 Share Posted March 3, 2020 Isn't this all just demand pull from future quarters? I mean, sure, you get a bump from the lack of discounting, I guess, but not a 10% bump. ¯\_(ツ)_/¯ Link to comment Share on other sites More sharing options...
Liberty Posted March 3, 2020 Share Posted March 3, 2020 Isn't this all just demand pull from future quarters? I mean, sure, you get a bump from the lack of discounting, I guess, but not a 10% bump. ¯\_(ツ)_/¯ Probably only partly. A lot of people will buy stuff there because it's bulk, but normally they might have bought it elsewhere closer to them in smaller amounts (Walmart, etc). Link to comment Share on other sites More sharing options...
merkhet Posted March 3, 2020 Share Posted March 3, 2020 Isn't this all just demand pull from future quarters? I mean, sure, you get a bump from the lack of discounting, I guess, but not a 10% bump. ¯\_(ツ)_/¯ Probably only partly. A lot of people will buy stuff there because it's bulk, but normally they might have bought it elsewhere closer to them in smaller amounts (Walmart, etc). Yea, that’s a fair point. I still think 10% is likely more short-term noise than would be justified by a DCF of the actual impact in long-term cash flows. Link to comment Share on other sites More sharing options...
Liberty Posted March 3, 2020 Share Posted March 3, 2020 Isn't this all just demand pull from future quarters? I mean, sure, you get a bump from the lack of discounting, I guess, but not a 10% bump. ¯\_(ツ)_/¯ Probably only partly. A lot of people will buy stuff there because it's bulk, but normally they might have bought it elsewhere closer to them in smaller amounts (Walmart, etc). Yea, that’s a fair point. I still think 10% is likely more short-term noise than would be justified by a DCF of the actual impact in long-term cash flows. Yeah, anything based on what's happening now would be an opportunistic trade. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted March 18, 2020 Share Posted March 18, 2020 Given how poor Sears' execution has been over the past decade, I have a difficult time believing that any part of its operations are worth $1 billion. Clearly Costco disagrees. https://transformco.com/press-releases/pr/2145 Link to comment Share on other sites More sharing options...
ValueMaven Posted September 20, 2020 Share Posted September 20, 2020 Thoughts on valuation here? I'm amazed at how well they continue to execute. Link to comment Share on other sites More sharing options...
ValueMaven Posted September 26, 2020 Share Posted September 26, 2020 Very solid quarter. E-sales were up 90% y/y. A lot of momentum now around a possible special dividend. With that said - I've totally missed this one. I have a hard time buying-up into this. 40x earnings for a retailer?! What am I missing Link to comment Share on other sites More sharing options...
bookie71 Posted September 26, 2020 Share Posted September 26, 2020 Very solid quarter. E-sales were up 90% y/y. A lot of momentum now around a possible special dividend. With that said - I've totally missed this one. I have a hard time buying-up into this. 40x earnings for a retailer?! What am I missing Nothing, remember that you are buying the stock and not the company. What would you pay for company? Is stock more or less? Link to comment Share on other sites More sharing options...
learner Posted September 26, 2020 Share Posted September 26, 2020 Charlie Munger purchased around $300, before covid driven ecomm tailwinds. Just something to think about Link to comment Share on other sites More sharing options...
Mephistopheles Posted September 26, 2020 Share Posted September 26, 2020 Charlie Munger purchased around $300, before covid driven ecomm tailwinds. Just something to think about Munger said recently that Costco is a bigger threat to Amazon than vice versa. The more I think about it, I think he's right. Costco has something Amazon does not, which is quality control. The Kirkland brand increases its moat day by day with an ever wider selection of products. Amazon sells good stuff but also a lot of crap. Costco has so much more room to grow from here and I wouldn't be surprised if it takes a larger piece of the pie going forward than Amazon. When AMZN was at this market cap, it's valuation was even worse. I closed my eyes and have been buying consistently at 300 +. Link to comment Share on other sites More sharing options...
bizaro86 Posted September 26, 2020 Share Posted September 26, 2020 I'm long Costco, and not selling. I think their current growth trajectory puts the current price in the ballpark. Earnings have nearly tripled over the last 10 years, and they have added a number of new countries that they will be able to scale. I haven't bought for a couple of years now, though, as its definitely expensive in the short run. Link to comment Share on other sites More sharing options...
Gregmal Posted September 26, 2020 Share Posted September 26, 2020 When it comes to special companies like COST, valuation DOES NOT MATTER! I was long in the camp of "bbbbbbut the valuation". In March I threw in the towel and decided to just buy a position around 290 and appreciate it for what it is; a great company. The people who have worried about Costco's valuation, have consistently missed out on the opportunity to own it...much to their dismay. Link to comment Share on other sites More sharing options...
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