Costco's most recent trend suggests a bullish bias. One trading opportunity on Costco is a Bull Put Spread using a strike $232.50 short put and a strike $227.50 long put offers a potential 21.07% return on risk over the next 27 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $232.50 by expiration. The full premium credit of $0.87 would be kept by the premium seller. The risk of $4.13 would be incurred if the stock dropped below the $227.50 long put strike price.
The 5-day moving average is moving up which suggests that the short-term momentum for Costco is bullish and the probability of a rise in share price is higher if the stock starts trending.
The 20-day moving average is moving up which suggests that the medium-term momentum for Costco is bullish.
The RSI indicator is at 78.45 level which suggests that the stock is neither overbought nor oversold at this time.
To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here
LATEST NEWS for Costco
Weak Earnings Growth Ahead
Wed, 20 Mar 2019 21:34:09 +0000
Weak Earnings Growth Ahead
Costco Management Talks Gross Margin and Special Dividends
Wed, 20 Mar 2019 20:21:00 +0000
Here are several must-see quotes from Costco's earnings call.
5 Stocks To Buy for the Happiest Employees
Wed, 20 Mar 2019 19:33:35 +0000
Investors have many different tools with which to judge companies. Most of these tend to focus on financial metrics, such as revenues or earnings. Sometimes, we analyze non-numerical things, such as a company's competitive moat, or the quality of its management team.However, investors rarely consider how content a company's employees are. And, arguably, that's a big mistake. At the end of the day, a company's workforce is one of its most vital assets. Particularly for businesses that interact heavily with the general public, having an upbeat and welcoming group of employees can be a hugely underrated asset. Happy employees are great for your brand. They also tend to cut down on more hidden costs, such as severance, employee training, compensation for safety accidents and other such expenses that pile up when workers are dissatisfied and frequently leaving your firm. * 5 Cloud Stocks to Help Your Portfolio Fly With that in mind, here are five stocks to buy for happy employees. Our first stock gives a good example of the benefits of a content labor force.InvestorPlace – Stock Market News, Stock Advice & Trading Tips Costco (COST)Source: Mike Mozart via Flickr (Modified) Have you ever wondered why people rave about shopping at Costco (NASDAQ:COST)? It's a little strange that folks get so excited to buy large quantities of basic goods in rather drab industrial-looking buildings. What is Costco doing differently than less favored big-box retailers such as Wal-Mart's (NYSE:WMT) Sam's Club? I'd argue that Costco's employees make the difference. Whereas employees in other big chain stores tend to seem aloof and unmotivated, Costco makes you feel more welcome. Presumably, employees have that extra drive thanks to generous renumeration from the company. Costco offers employees a $14-an-hour, company-wide minimum wage and pays more than $22 per hour on average. That's a huge figure for a retailing company.Indeed's recent survey of workplace satisfaction also showed employees appreciated other aspects besides the base pay. Costco is known for having great benefits including generous vacation pay, and it promotes heavily from within. You can make a good argument that Costco's superior team of employees has been a defining reason why its stock has crushed most other retailers over the past 25 years. Berkshire Hathaway (BRK.B)Source: Shutterstock The Indeed survey specifically mentioned Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B) subsidiary Aflac as one of its best places to work. While Aflac is known for its humorous advertising, apparently it has also set itself apart from the competition by treating its employees well. That's a trait that runs broadly across the Berkshire Hathaway set of companies. Warren Buffett has built a reputation as a hands-off manager who likes to acquire private and family-run companies, and let them keep operating largely independently. Buffett values company culture, and unlike many buyers, Buffett doesn't gut companies to save money after purchasing them. * 10 Stocks on the Rise Heading Into the Second Quarter This respect for employees has paid Berkshire Hathaway many dividends over the years. Buffett is often able to buy companies for less money than other suitors would have to pay, as potential sellers know they'll get a strong and trustworthy partner by selling to Buffett. It's a classic example of paying more in the short run to elevate your reputation to a far higher level over the long haul. The results for BRK.B stock over the decades speak for themselves. Capital One (COF)Source: Shutterstock Like Aflac, Capital One (NYSE:COF) is another large financial corporation that interacts with thousands of customers every day across its multitude of branches. In fact, Capital One is now one of the nation's 10 largest banks. In the competitive world of big banking, any edge can help in terms of attracting and retaining customers. Capital One has chosen to give its employees generous benefits as part of its effort to distinguish itself from rival banks. And the approach appears to be working. COF stock has reached new all-time highs after the financial crisis; that's an achievement that many other banks still haven't managed.What sets Capital One apart? According to Indeed, the company offers particularly generous health and wellness benefits. These include 18 weeks of maternity leave and assistance with adoption services, for example. One employee that Indeed quoted said that the most difficult part was, "taking advantage of all the benefits." That's not a bad problem to have. With the stock trading at just 7x earnings, Capital One is clearly doing well enough to reward both its shareholders and employees generously. FedEx (FDX)Source: Mike Mozart via Flickr Trucking and transportation isn't the first area you'd probably think of when trying to find companies with particularly happy employees. But give FedEx (NYSE:FDX) credit for topping expectations. The popular conception of a truck driver is a lonely, difficult, and stressful life. Listen to someone like Democratic presidential candidate Andrew Yang talk about truckers, and you'd think it were one of the worst jobs in the world. Yet, FedEx is able to keep its employees happy. It has done so, in large part by offering generous benefits to its employees. Importantly, it offers these benefits even to its part-time staff. That's a huge motivation for workers in an age when so many companies intentionally refuse to give employees 40 hour weeks precisely to avoid paying benefits. * 4 Unexpected Trade War Stocks That Will Benefit From an End to Tariffs As a potential shareholder, you might think this sort of largess would weigh too heavily on the bottom line. But it hasn't. Over the past 10 years, FedEx has managed 8% annualized revenue growth, and incredible 21% EPS growth. It turns out that treating your employees well can in fact be a win-win for both them and stock owners. Apple (AAPL)Source: Shutterstock This last one probably doesn't come as a surprise if you've shopped at their stores. But yes, Apple (NASDAQ:AAPL) also made Indeed's list of the 10 companies with the happiest employees. This is a natural achievement for Apple, as it fits so very well with their status as a luxury brand. Apple is able, in large part, to charge higher prices for its products because of the brand. An Apple product is an aspirational one. People keep buying Apple phones habitually, regardless of the cost and comparisons to competitors' products, in large part due to this effect.And a big part of that comes from keeping Apple's reputation spotless. Apple helps achieve this by making sure its employees are delighted to work there. Like others on this list, Apple offers extremely generous benefits, the most appealing of which may be its policy of giving nearly a month of vacation days every year. American companies are notably stingy with vacation days, as opposed to European and Japanese firms. This difference gives Apple a key competitive edge in finding and retaining the best employees against stiff competition across the tech industry.At the time of this writing, Ian Bezek owned BRK.B and FDX stock. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Invincible Stocks Leading The Bull Market Higher * 5 Dow Jones Stocks Coming to Life * 7 of the Best High-Yield Funds for 2019 and Beyond Compare Brokers The post 5 Stocks To Buy for the Happiest Employees appeared first on InvestorPlace.
Should Investors Ignore Costco’s Valuation over Comps?
Wed, 20 Mar 2019 18:40:02 +0000
What Analysts’ Recent Activity Indicates about Costco Stock(Continued from Prior Part)Solid performance Shares of Costco (COST) are up 16.4% YTD (year-to-date) as of March 19. The strong uptrend in Costco stock is supported by the company’s
Will Private Labels Wake Up Amazon Stock?
Wed, 20 Mar 2019 18:06:36 +0000
E-commerce data analytics firm Marketplace Pulse recently conducted in-depth research on private label brands on Amazon (NASDAQ:AMZN). The conclusion seemed unfavorable for Amazon stock. According to the firm, Amazon's private-label brand portfolio actually has more duds than studs.Source: Shutterstock The research suggests that Amazon's private-label business isn't growing. That could be the reason why Amazon's e-commerce growth machine has cooled rapidly. Indeed, over the past several quarters, Amazon's e-commerce business has gone from a 20%-plus grower which dominated the digital retail world to growing just above 10% and ceding market share to other digital retailers. * 5 Cloud Stocks to Help Your Portfolio Fly But there's another big takeaway from Marketplace Pulse's report, one that is bullish for Amazon stock. Namely, the report included a quote from an Amazon spokesperson who said that Amazon's private-label products represent less than 1% of the company's total sales.InvestorPlace – Stock Market News, Stock Advice & Trading TipsThat's tiny. At other large retailers, the private-label business represents 30% or more of total sales. Thus, the bullish takeaway from the report is that Amazon's private-label business, with the right execution, could grow by leaps and bounds over the next several years.That would be big for Amazon stock. Most importantly, it would wake up the Amazon e-commerce- growth machine, reinvigorate investors' enthusiasm about Amazon stock, and spur more investors to buy AMZN stock. Furthermore, it would boost the company's margins, add firepower to what is already turning into a robust profit-growth outlook, and help AMZN grow into its valuation.Overall, a private-label surge could turn into a big deal for Amazon stock. Here's a deeper look. Amazon's Private-Label Business Is TinyAmazon is a big company. With over $230 billion of sales last year, Amazon is the second-largest retailer in the world, behind only Walmart (NYSE:WMT).But, for such a big retailer, Amazon's private-label business is really small. Amazon's private-label business represents less than 1% of its total sales. That means that Amazon's private-label business generates less than $2.3 billion of annual revenue.That's small. Over at Costco (NASDAQ:COST), the Kirkland brand alone represents nearly one-third of its total sales, or about $40 billion. Similarly, one-third of Target's (NYSE:TGT) total sales in 2018, or about $25 billion, were from owned and exclusive brands,. At Kroger (NYSE:KR), private-label -brand-unit share hit 30.5% in the fourth-quarter, which, at an annualized rate, represents about a $34 billion business.At many other big retailers, the private -label business runs anywhere from 15%-30%-plus of total sales, equating to $15 billion-$40 billion-plus of annual revenue.Next to those figures, Amazon's sub-1% private label penetration rate and roughly $2 billion private-label business are tiny. Amazon's Private-Label Business Could Be Really Big One DayAmazon's private label business could be really big one day.The math is pretty simple. An average private-label penetration rate of 25% on all of Amazon's 2018 revenue, excluding the sales of its cloud business, implies a private-label business of nearly $52 billion, versus its private-label business of about $2 billion today. That represents a 25-fold increase in private label sales. That's huge. Furthermore, it equates to an additional $50 billion revenue opportunity, for a company that reported $232 billion of sales in 2018. That means that AMZN could grow its top line 20%-plus by expanding its private-label business.Private-label products are made and sold by the company itself, reducing the role of middle men. Thus, private label sales increase margins. That means that, if AMZN increases its private-label business to 20% of its revenue, its bottom line would get a favorable bump of much more than 20%.In other words, this isn't small peanuts. It's a big deal.Now, the big question is: can AMZN do it? Can it turn a relatively small private- label business into a $50 billion-plus behemoth? The short answer is: yes. AMZN has done it before with other businesses, and it will do it again.The company has the data, reach, reputation, and brand equity necessary to sell Amazon-branded products on a large scale. The Marketplace Pulse research report partly corroborates this thesis. Although many of Amazon's private-label brands are duds, the ones with the name "Amazon" attached to them are doing very well, the report stated. That speaks volumes about this company's brand equity and reputation.Meanwhile, AMZN hasn't yet figured out a way to consistently utilize its wealth of consumer preference and shopping data to help it sell private-label products. But it's only a matter of time before the company does so. When it does, the company's private-label business will boom, especially considering that AMZN can put those products in front of millions of shoppers.So it does seem like only a matter of time before Amazon executes on its tremendous opportunity to create a huge private-label business. The Bottom Line on Amazon StockAmazon stock is a long-term winner, mostly because of this company's multiple, large growth levers. One underappreciated big growth lever is Amazon's opportunity in the private-label business. AMZN currently has one of the smallest private label businesses of any major retailer. With the right execution, that relatively small private-label business could become very large and raise the company's top line by 20%-plus and add far more to the bottom line.All in all, investors should stick with Amazon stock for many reasons, including its $50 billion private-label opportunity.As of this writing, Luke Lango was long AMZN, COST, TGT, and KR. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Invincible Stocks Leading The Bull Market Higher * 5 Dow Jones Stocks Coming to Life * 7 of the Best High-Yield Funds for 2019 and Beyond Compare Brokers The post Will Private Labels Wake Up Amazon Stock? appeared first on InvestorPlace.
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