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Hot Stock Pick Update: Analyst rating cut spells better entry price

Posted March 1, 2008

by J. Christoph Amberger 

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".

The stock was trading just below $65 at the time and has oscillated around that level ever since.

Yesterday, however, COST dropped to a closing price of $61.92 after Goldman Sachs had downgraded the discounter to "neutral" from "buy" valuation last Wednesday.

I don't necessarily consider this downgrading to be a reflection on Costco's revenues and profit situation, but rather a symptom of the recessionary gloom and doom that has contaminated the perception of the American economy among U.S. Consumers.

Hence, I remain firm on my buy rating of the company… which at current levels still has excellent potential to appreciate by mid-year. 

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Posted by J. Christoph Amberger · Filed Under US Stocks and Markets 

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