Email This Article |

COST is up 15% — Make Costco part of you recession-proof portfolio

Posted by J. Christoph Amberger on May 2, 2008

(No Ratings Yet)

Loading ...

Baltimore — (TFN): ): On February 7, 2008, in our TFN Hot Stock Pick of the Week, I suggested that you buy discount wholesale giant Costco (COST) “around or below $65, for medium-term gains of 15-20% by mid-year”.

On The stock was trading just below $65 at the time.

Of course, like clockwork, the moment I made that recommendation, the stock price began to fall. On March 1, at around $62, I repeated my recommendation at the lower price.

This I took not as a reflection on Costco’s revenues and profit situation, but rather a symptom of the recessionary gloom and doom that contaminated the perception of the American economy among U.S. Consumers. You know what I mean. The “It’s gonna get much worse before it gets better” chorus…

You know how I dislike tooting my own horn…

As of today’s $71.22, we are up 9.5% over my initial buy, and 15% over the follow-up. The company will be paying a 16-cent dividend in late May. And I believe its membership model will buffer it from any fall-out of the consumer-driven recession. Shift COST over to your long-term recession-proof portfolio!

****Make sure you sign up for our FREE TFN News Feed for breaking news, special reports and new financial videos. Sign up through your favorite reader here. Or, if you prefer, have the feed delivered to your email.

Popularity: 6%

Posted by J. Christoph Amberger · Filed Under Hot Stock Pick of the Week