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14,000 | 626,156 | 2021-10-26 00:00:00 UTC | Should You Buy Costco Stock Right Now? | COST | https://www.nasdaq.com/articles/should-you-buy-costco-stock-right-now-2021-10-26 | null | null | Shares of Costco Wholesale (NASDAQ: COST) have been on a tear since the pandemic began in March 2020. The stock price tacked upward another 6.4% in just the last month following another strong earnings report.
After delivering a market-smashing return of 223% over the last five years, the stock's price-to-earnings (P/E) ratio stands at a high 40 times forward earnings estimates.
Let's see why investors are so bullish on Costco, and whether investors should buy this stock at these high valuations.
Image source: Getty Images.
Costco has unrivaled sales efficiency
You can't go wrong investing in companies that sell everyday essentials, especially Costco that goes to great lengths to sell quality goods at very low prices. When a recession (or pandemic) hits, it helps to own these types of companies that sell things in large quantities to cash-strapped consumers.
Costco has always prioritized selling at volume over profit margin. It keeps prices on many items lower than competitors, including Amazon. Selling cheap starts with maintaining efficient distribution. It ships inventory to the warehouses directly from the manufacturer in some cases. Costco is also frugal in only selling the fast-selling colors and sizes of certain items to drive the highest turnover. The average Costco warehouse has only about 3,700 stock-keeping units (SKUs, or distinctive items for sale) available, which is significantly less than the average of leading retailers.
Even with lower inventory selection, Costco generates significantly greater sales per square foot than Walmart (NYSE: WMT). In fiscal 2020, Costco generated about $1,400 of sales per square feet of warehouse space, about double that of Walmart. Costco's sales efficiency is up there with high-margin retail businesses like Lululemon Athletica (NASDAQ: LULU), which is impressive for a discount warehouse operator.
Costco knows that the lowest prices will drive the highest amount of sales volume, which is all that matters. Membership fees make up most of Costco's operating income, which reveals the extent that Costco goes to keep prices low and deliver value to customers.
The stock is expensive
Customers expect that, when they walk into a Costco warehouse, the prices they see are the lowest prices anywhere. This promise has driven exceptionally high sales growth over the past year. Costco's comparable-store sales, excluding fuel and currency changes, increased by 13.4% year over year, up from 6.1% in fiscal 2019.
The acceleration in growth during the pandemic has investors placing a high value on the stock. The shares currently fetch a forward P/E of 40. That is much more expensive than Walmart's 23.7 or Target's (NYSE: TGT) 19.6 forward P/E.
It's not difficult to see why investors are rewarding Costco with a premium. Historically, Costco has delivered higher total sales and earnings growth than its top competitors.
COST Revenue (TTM) data by YCharts
Moreover, Costco's lower SKUs per warehouse should make it easier to navigate around the supply bottlenecks at the ports and keep its warehouses stocked for the holidays. As a result, investors are probably discounting market-share gains in the near term.
Still, investors have to draw the line somewhere on what they are willing to pay to own the stock. At these highs, investors are betting that Costco will maintain its pandemic-driven growth, but I would be cautious about extrapolating that momentum too far. Costco's fiscal fourth-quarter sales growth decelerated to 17% in that quarter, down from 21% in the previous quarter, so it may already be starting to revert to its pre-pandemic growth in the high single-digit range. Analysts currently expect Costco to report 8.5% growth in total sales in fiscal 2022.
Paying a higher P/E in the face of slowing growth is a recipe for disappointment. I would keep Costco on a watch list and look to buy the stock during a recession or market correction to get a better deal.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. John Ballard owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon, Costco Wholesale, and Lululemon Athletica. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Even with lower inventory selection, Costco generates significantly greater sales per square foot than Walmart (NYSE: WMT). Costco's sales efficiency is up there with high-margin retail businesses like Lululemon Athletica (NASDAQ: LULU), which is impressive for a discount warehouse operator. Shares of Costco Wholesale (NASDAQ: COST) have been on a tear since the pandemic began in March 2020. | Even with lower inventory selection, Costco generates significantly greater sales per square foot than Walmart (NYSE: WMT). Analysts currently expect Costco to report 8.5% growth in total sales in fiscal 2022. The Motley Fool owns shares of and recommends Amazon, Costco Wholesale, and Lululemon Athletica. | Let's see why investors are so bullish on Costco, and whether investors should buy this stock at these high valuations. Costco has unrivaled sales efficiency You can't go wrong investing in companies that sell everyday essentials, especially Costco that goes to great lengths to sell quality goods at very low prices. The stock is expensive Customers expect that, when they walk into a Costco warehouse, the prices they see are the lowest prices anywhere. | Let's see why investors are so bullish on Costco, and whether investors should buy this stock at these high valuations. Costco has unrivaled sales efficiency You can't go wrong investing in companies that sell everyday essentials, especially Costco that goes to great lengths to sell quality goods at very low prices. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Costco Wholesale wasn't one of them! | null |
14,001 | 626,158 | 2021-10-25 00:00:00 UTC | Large employer group launches pharmacy benefit management business | COST | https://www.nasdaq.com/articles/large-employer-group-launches-pharmacy-benefit-management-business-2021-10-25 | null | null | Adds background
Oct 25 (Reuters) - A nonprofit coalition of nearly 40 companies, including U.S. retailers Walmart WMT.N and Costco COST.O, said on Monday it had launched a new firm that would offer pharmacy benefit management (PBM) services for employers.
EmsanaRx, the PBM unit of the Purchaser Business Group on Health (PBGH) coalition, will provide employers a fixed price per prescription as well as guidance from a clinical pharmacist account manager.
PBMs serve as intermediaries between drug manufacturers, health insurance plans and pharmacies to negotiate prescription drug prices.
San Francisco-based PBGH has been assisting large employers and other healthcare consumers for over three decades in getting access to higher quality care and reducing costs.
Employers have been trying to reign in healthcare costs with limited success.
Earlier this year, the joint venture of Amazon.com Inc AMZN.O, Berkshire Hathaway Inc BRKa.Nand JPMorgan Chase & Co JPM.N ceased to exist, three years after the companies came together hoping to clamp down escalating healthcare costs.
In November last year, Amazon launched an online pharmacy to deliver prescription medications in the United States.
PBGH is the majority owner of Emsana Health, the company that will house the PBM unit. The group also counts Boeing Co BA.N and Microsoft Corp MSFT.O among its members.
"For the first time, employers will own their own data and have the information and tools and clinical resources dedicated exclusively to their unique needs and patient populations," said Greg Baker, who would helm EmsanaRx.
Cigna Corp's CI.N Evernorth and UnitedHealth Group's UNH.N unit Optum are among the largest providers of PBM services in the United States. Health conglomerate CVS Health Corp CVS.N also has a PBM business.
(Reporting by Amruta Khandekar; Editing by Krishna Chandra Eluri and Maju Samuel)
(([email protected];))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Adds background Oct 25 (Reuters) - A nonprofit coalition of nearly 40 companies, including U.S. retailers Walmart WMT.N and Costco COST.O, said on Monday it had launched a new firm that would offer pharmacy benefit management (PBM) services for employers. San Francisco-based PBGH has been assisting large employers and other healthcare consumers for over three decades in getting access to higher quality care and reducing costs. Employers have been trying to reign in healthcare costs with limited success. | Adds background Oct 25 (Reuters) - A nonprofit coalition of nearly 40 companies, including U.S. retailers Walmart WMT.N and Costco COST.O, said on Monday it had launched a new firm that would offer pharmacy benefit management (PBM) services for employers. San Francisco-based PBGH has been assisting large employers and other healthcare consumers for over three decades in getting access to higher quality care and reducing costs. Employers have been trying to reign in healthcare costs with limited success. | Adds background Oct 25 (Reuters) - A nonprofit coalition of nearly 40 companies, including U.S. retailers Walmart WMT.N and Costco COST.O, said on Monday it had launched a new firm that would offer pharmacy benefit management (PBM) services for employers. San Francisco-based PBGH has been assisting large employers and other healthcare consumers for over three decades in getting access to higher quality care and reducing costs. Employers have been trying to reign in healthcare costs with limited success. | Employers have been trying to reign in healthcare costs with limited success. Adds background Oct 25 (Reuters) - A nonprofit coalition of nearly 40 companies, including U.S. retailers Walmart WMT.N and Costco COST.O, said on Monday it had launched a new firm that would offer pharmacy benefit management (PBM) services for employers. San Francisco-based PBGH has been assisting large employers and other healthcare consumers for over three decades in getting access to higher quality care and reducing costs. | null |
14,002 | 626,161 | 2021-10-24 00:00:00 UTC | After Last Year's Surge, There's Even More Growth Ahead for Costco | COST | https://www.nasdaq.com/articles/after-last-years-surge-theres-even-more-growth-ahead-for-costco-2021-10-24 | null | null | People flock to Costco (NASDAQ: COST) for everyday goods, but you can also buy consumer discretionary items such as vacation packages and expensive jewelry at the warehouse retailer. In this video clip from "Beat & Raise," recorded on Sept. 24, Fool.com contributors Neil Patel and Demitri Kalogeropoulos discuss how this piece of the business is contributing to the retailer's phenomenal growth.
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Neil Patel: It's like you said, Demitri and Brian, I think both of you alluded to this, that it seems impressive they're still growing. I don't know what revenue growth that you mentioned, sorry, but they're still growing after last year's surge. I think for a company this size, I think investors who are on the sideline think that, OK, very happy, 100 plus warehouses, how much more can they grow? Last year was basically free marketing for Costco. People who weren't already members, now you have a reason to be a member of Costco. I think they're going to attack members who see the value proposition of being a customer there, and so the fact that they're still growing compared to 2020 is pretty remarkable.
Demitri Kalogeropoulos: On that point too, one other cool thing about Costco is, they're obviously a consumer staples they're in that category of obviously pantry staples, and that's why they were an essential retailer through the pandemic and they stayed open and people just flock to their stores. But they also have a huge consumer discretionary business, I mentioned there was travel, you can buy vacations and stuff: cruise ship, cruise lines, whatever you want. I was reading the conference call today and they mentioned they sold over $100,000 rings, which is interesting when a single-product sale is big enough that the CFO would mention in theirearnings call [laughs] But Costco does that. They've also got that really high-end. If you want to be very discretionary with your spending, you can do that at Costco too.
Demitri Kalogeropoulos owns shares of Costco Wholesale. Neil Patel has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | People flock to Costco (NASDAQ: COST) for everyday goods, but you can also buy consumer discretionary items such as vacation packages and expensive jewelry at the warehouse retailer. 10 stocks we like better than Costco Wholesale When our award-winning analyst team has a stock tip, it can pay to listen. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Costco Wholesale wasn't one of them! | People flock to Costco (NASDAQ: COST) for everyday goods, but you can also buy consumer discretionary items such as vacation packages and expensive jewelry at the warehouse retailer. Demitri Kalogeropoulos owns shares of Costco Wholesale. The Motley Fool owns shares of and recommends Costco Wholesale. | 10 stocks we like better than Costco Wholesale When our award-winning analyst team has a stock tip, it can pay to listen. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Costco Wholesale wasn't one of them! People flock to Costco (NASDAQ: COST) for everyday goods, but you can also buy consumer discretionary items such as vacation packages and expensive jewelry at the warehouse retailer. | * They just revealed what they believe are the ten best stocks for investors to buy right now... and Costco Wholesale wasn't one of them! People flock to Costco (NASDAQ: COST) for everyday goods, but you can also buy consumer discretionary items such as vacation packages and expensive jewelry at the warehouse retailer. 10 stocks we like better than Costco Wholesale When our award-winning analyst team has a stock tip, it can pay to listen. | null |
14,003 | 626,164 | 2021-10-23 00:00:00 UTC | Now the World's Third-Largest Retailer, Costco Is Still Growing Its Global Presence | COST | https://www.nasdaq.com/articles/now-the-worlds-third-largest-retailer-costco-is-still-growing-its-global-presence-2021-10 | null | null | Costco (NASDAQ: COST) is building some interesting new warehouses in Japan and elsewhere in the world, further evidence of the retailer's path toward strong future growth. In this video clip from "Beat & Raise," recorded on Sept. 24, Fool.com contributors Brian Withers, Demitri Kalogeropoulos, and Neil Patel take a look at the warehouse retailer's presence worldwide.
10 stocks we like better than Costco Wholesale
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Brian Withers: This is another one that I'm just super surprised at. I guess I shouldn't be surprised that as the coronavirus abated and people started getting vaccines, they're out to Costco and spending more money. I was going to show a couple of slides, they have of Costco today presentation that has a couple of interesting little tidbits if you're not super familiar with Costco. Right in the beginning, they have a few of the, I guess these are the newest Costcos, and this is in Japan, and I don't know if you noticed there's something a little bit different about this Costco then, Demitri sees it. What's different?
Demitri Kalogeropoulos: Unless that's photoshop, I see a big parking lot on the roof. [laughs]
Withers: On the roof. Absolutely. It's on the roof, and they have the gas station here which is impressive. But I was just like, "Wow, look at all [laughs] those cars on the roof." It looks like it's a double-decker parking lot even on the top. That's pretty interesting. Certainly, the parking lot around the edges here smaller. Look at the next one. This is from a place near Nashville. You can see the huge parking lot and there's no parking on the roof. [laughs] Just a couple of more, Little Rock, Oklahoma, Springfield.
Neil Patel: Isn't Japan the country with the third most locations for them?
Withers: It has a warehouse that we'll see in a minute. But I didn't realize.
Patel: They have a lot of stores in the area.
Withers: Yeah. This didn't dawn on me either, that they're the third largest global retailer. I think that might be 12th largest retailer in the Fortune 500, I'm not sure. They may even be 12.
Patel: Yeah. It might be 12 overall actually.
Withers: A hundred billion mark.
Kalogeropoulos: It's interesting because I know they were the second largest at least for a while there. I wonder who hedged in there in second place behind Walmart, I'd have to check that.
Patel: Amazon maybe.
Withers: I'd wonder if they're counting Amazon as a retailer; 192 billion in sales, 288,000 employees. Here's the warehouses. They have 30 in Japan. So Canada, Mexico. It's likely that these are larger.
Patel: Iceland, wow. [laughs]
Withers: Iceland, pretty nice. Five hundred and sixty-four warehouses in the US, that's impressive. This must be their stores. They call them warehouses, right?
Patel: Yeah.
Withers: This number is pretty impressive to this cardholder thing. As you sign up for the executive, Demitri, you talked a little bit about the executive membership, you get I think it's now a Visa, it used to be I think a Mastercard. But you get points and you get cashback and stuff, and that's a super cool feature. Four billion in membership fee income. You talked about the 91 percent. Really pretty cool. Seems to be just doing well. I know they've worked on their online presence as well, and so that's a bigger deal.
Kalogeropoulos: That was something a lot of people were worried about for a while there too. It made sense that the bare idea that Costco's, it's pretty a big part of their competitive advantages that they have. They cover wide areas with their stores. They don't have a store within ten-minute drive of everybody. That 564, I think is compared to like a Walmart which might have over 2,000 locations in the US. You would think that might limit their ability to do quick drop two-day delivery or within 24 hours like Walmart's doing and what Target's doing. But there's no evidence that Costco is having any trouble with e-commerce compared to Target or any company that has way more stores. It's another wild factor for their logistics team.
Brian Withers has no position in any of the stocks mentioned. Demitri Kalogeropoulos owns shares of Costco Wholesale. Neil Patel has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Costco (NASDAQ: COST) is building some interesting new warehouses in Japan and elsewhere in the world, further evidence of the retailer's path toward strong future growth. I guess I shouldn't be surprised that as the coronavirus abated and people started getting vaccines, they're out to Costco and spending more money. 10 stocks we like better than Costco Wholesale When our award-winning analyst team has a stock tip, it can pay to listen. | Demitri Kalogeropoulos owns shares of Costco Wholesale. Costco (NASDAQ: COST) is building some interesting new warehouses in Japan and elsewhere in the world, further evidence of the retailer's path toward strong future growth. 10 stocks we like better than Costco Wholesale When our award-winning analyst team has a stock tip, it can pay to listen. | Right in the beginning, they have a few of the, I guess these are the newest Costcos, and this is in Japan, and I don't know if you noticed there's something a little bit different about this Costco then, Demitri sees it. Costco (NASDAQ: COST) is building some interesting new warehouses in Japan and elsewhere in the world, further evidence of the retailer's path toward strong future growth. 10 stocks we like better than Costco Wholesale When our award-winning analyst team has a stock tip, it can pay to listen. | Costco (NASDAQ: COST) is building some interesting new warehouses in Japan and elsewhere in the world, further evidence of the retailer's path toward strong future growth. 10 stocks we like better than Costco Wholesale When our award-winning analyst team has a stock tip, it can pay to listen. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Costco Wholesale wasn't one of them! | null |
14,004 | 626,165 | 2021-10-22 00:00:00 UTC | Noteworthy Friday Option Activity: PYPL, COST, BA | COST | https://www.nasdaq.com/articles/noteworthy-friday-option-activity%3A-pypl-cost-ba-2021-10-22 | null | null | Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in PayPal Holdings Inc (Symbol: PYPL), where a total of 204,086 contracts have traded so far, representing approximately 20.4 million underlying shares. That amounts to about 238% of PYPL's average daily trading volume over the past month of 8.6 million shares. Particularly high volume was seen for the $245 strike call option expiring October 22, 2021, with 10,387 contracts trading so far today, representing approximately 1.0 million underlying shares of PYPL. Below is a chart showing PYPL's trailing twelve month trading history, with the $245 strike highlighted in orange:
Costco Wholesale Corp (Symbol: COST) options are showing a volume of 34,047 contracts thus far today. That number of contracts represents approximately 3.4 million underlying shares, working out to a sizeable 187.5% of COST's average daily trading volume over the past month, of 1.8 million shares. Especially high volume was seen for the $500 strike call option expiring October 29, 2021, with 3,303 contracts trading so far today, representing approximately 330,300 underlying shares of COST. Below is a chart showing COST's trailing twelve month trading history, with the $500 strike highlighted in orange:
And Boeing Co. (Symbol: BA) saw options trading volume of 131,694 contracts, representing approximately 13.2 million underlying shares or approximately 157.6% of BA's average daily trading volume over the past month, of 8.4 million shares. Particularly high volume was seen for the $215 strike call option expiring October 22, 2021, with 12,313 contracts trading so far today, representing approximately 1.2 million underlying shares of BA. Below is a chart showing BA's trailing twelve month trading history, with the $215 strike highlighted in orange:
For the various different available expirations for PYPL options, COST options, or BA options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Especially high volume was seen for the $500 strike call option expiring October 29, 2021, with 3,303 contracts trading so far today, representing approximately 330,300 underlying shares of COST. Below is a chart showing PYPL's trailing twelve month trading history, with the $245 strike highlighted in orange: Costco Wholesale Corp (Symbol: COST) options are showing a volume of 34,047 contracts thus far today. That number of contracts represents approximately 3.4 million underlying shares, working out to a sizeable 187.5% of COST's average daily trading volume over the past month, of 1.8 million shares. | Below is a chart showing PYPL's trailing twelve month trading history, with the $245 strike highlighted in orange: Costco Wholesale Corp (Symbol: COST) options are showing a volume of 34,047 contracts thus far today. Below is a chart showing COST's trailing twelve month trading history, with the $500 strike highlighted in orange: And Boeing Co. (Symbol: BA) saw options trading volume of 131,694 contracts, representing approximately 13.2 million underlying shares or approximately 157.6% of BA's average daily trading volume over the past month, of 8.4 million shares. That number of contracts represents approximately 3.4 million underlying shares, working out to a sizeable 187.5% of COST's average daily trading volume over the past month, of 1.8 million shares. | Below is a chart showing COST's trailing twelve month trading history, with the $500 strike highlighted in orange: And Boeing Co. (Symbol: BA) saw options trading volume of 131,694 contracts, representing approximately 13.2 million underlying shares or approximately 157.6% of BA's average daily trading volume over the past month, of 8.4 million shares. Below is a chart showing PYPL's trailing twelve month trading history, with the $245 strike highlighted in orange: Costco Wholesale Corp (Symbol: COST) options are showing a volume of 34,047 contracts thus far today. That number of contracts represents approximately 3.4 million underlying shares, working out to a sizeable 187.5% of COST's average daily trading volume over the past month, of 1.8 million shares. | Below is a chart showing COST's trailing twelve month trading history, with the $500 strike highlighted in orange: And Boeing Co. (Symbol: BA) saw options trading volume of 131,694 contracts, representing approximately 13.2 million underlying shares or approximately 157.6% of BA's average daily trading volume over the past month, of 8.4 million shares. Below is a chart showing PYPL's trailing twelve month trading history, with the $245 strike highlighted in orange: Costco Wholesale Corp (Symbol: COST) options are showing a volume of 34,047 contracts thus far today. That number of contracts represents approximately 3.4 million underlying shares, working out to a sizeable 187.5% of COST's average daily trading volume over the past month, of 1.8 million shares. | null |
14,005 | 626,167 | 2021-10-21 00:00:00 UTC | Checking In on the Retail Sector | COST | https://www.nasdaq.com/articles/checking-in-on-the-retail-sector-2021-10-21 | null | null | Will Alphabet's (NASDAQ: GOOGL) (NASDAQ: GOOG) new Pixel phone be a hit? Which major retailer could be the next to drop tobacco products? Are we in for a record-setting Halloween? Motley Fool analysts Maria Gallagher and Jason Moser answer those questions; analyze the latest from Domino's Pizza (NYSE: DPZ), Virgin Galactic (NYSE: SPCE), Shopify (NYSE: SHOP), Microsoft (NASDAQ: MSFT), Oracle (NYSE: ORCL), and Restaurant Brands International (NYSE: QSR); and share two stocks on their radar: Zillow Group (NASDAQ: ZG) (NASDAQ: Z) and Marvell Technology (NASDAQ: MRVL).
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
10 stocks we like better than Microsoft
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This video was recorded on Oct. 15, 2021.
Chris Hill: It's a Motley Fool Money radio show. I'm Chris Hill. Joining me this week, senior analysts Jason Moser and Maria Gallagher. Good to see you both.
Maria Gallagher: Good to see you.
Hill: We've got the latest headlines from Wall Street. We will preview next week's events from Apple (NASDAQ: AAPL), Google, and more. As always, we've got a couple of stocks on our radar but we begin with the big macro. Retail sales in the month of September rose 0.7% which may not sound like a lot, but that was nearly a full percentage point higher than what economists were expecting. Maria, still a lot of X-factors out there in the economy but this was a really nice surprise.
Gallagher: Yeah, this was a great surprise and it's due to a couple of things. We are actually in the highest inflation environment in the U.S. in about 30 years. You see a lot of goods in short supply with supply chain constraints in full effect for goods people want to purchase, such as electronics and cars. However, retail sales are still increasing faster than inflation. So sales are up 14% compared to a 5.4% increase in the Consumer Price Index. It's still really strong consumption numbers out of the U.S. I think it's going to be really interesting to see how early holiday season shopping starts this year because they are telling us to start now due to the supply chain constraints. I wonder how many people are going to take them up on it or what November, December is going to look like in the next couple of months.
Hill: Jason, you think about the factors Maria just highlighted combined with some of the back-to-school shopping season. Again, great to see, particularly since the expectation was for a slight drop.
Jason Moser: I mean, I think she keyed in certainly on the shopping early. People are shopping earlier than usual. I mean, we've seen Amazon (NASDAQ: AMZN) already starting their Black Friday sales. Target (NYSE: TGT) doing something similar. I mean, this is just going to continue throughout the rest of the year. I think it's one thing I was thinking about, too. It's also worth remembering there are more ways to spend now. I mean, you've got high deposit balances, but I mean, look at the traction that buy now, pay later is gaining over this last year. I mean, it's giving consumers another way to pay, which I think that is stoking some demand there. It's nice to see likely some pull-forward here for early holiday season shopping but if supply chain issues can resolve themselves, maybe it's a bit more sustainable. I think it's something I'm going to keep an eye on, certainly, Goldman Sachs (NYSE: GS) recently cut their U.S. GDP growth forecast for 2022 from 4.4% to 4%. They were citing just basic macro concerns, questions regarding policy decisions in D.C., and supply chain issues. If we see those problems resolve themselves, these numbers could certainly be a little bit more sustainable.
Hill: Speaking of Goldman Sachs, earnings season kicked off this week with the big banks going first. JPMorgan Chase (NYSE: JPM), Bank of America (NYSE: BAC), Goldman Sachs, Wells Fargo (NYSE: WFC), all out with third-quarter reports. Jason, I'm not going to ask you to go through each one individually, [laughs] but let's start here. In your opinion, who looked the best this week?
Moser: Well, if I'm looking at Bank of America, Wells, JPMorgan, and Goldman, I mean, they all performed well, but I think I'd actually give Bank of America the win there. Just the numbers, generally speaking, revenue up 12%, net interest income was up 10%. That was thanks in part to a really healthy boost to deposits. So just talking about those deposit numbers, well, Bank of America grew deposits 15% record investment banking net income $1.2 billion, and they were able to release $1.1 billion in reserves. They continue to really just kill it on the digital platform. They have 41 million customers actively using their digital platform now and I'm one of them. I can tell you just from a customer's perspective, they've really have nailed it on the digital banking front. A lot of things to like about what Bank of America is doing.
Hill: JPMorgan Chase is by far the biggest of the big banks with Jamie Dimon at the helm, any takeaways from either their report or theirearnings call
Moser: You listen to Jamie Dimon talk about the supply chain issues. He said on the call, he didn't think we'll be talking about this stuff in the year. He really does view it as just a temporary bump in the road and that we're frankly, that we're focusing on it a little bit too much. He sees it as dampening a fairly good economy, not reversing a fairly good economy. We'll have to see how his sentiments change or remain the same there as the year goes on. I think, generally speaking, for banks on the bottom line, it remains a very strong environment for investment banking. Still a somewhat challenging time on the lending side, though, between these high deposit balances and low interest rates. That's getting ready to change and that's good because banks are going to have to start weaning themselves off that credit reserves release crush that they've been benefiting from over the last several quarters. Feels like Jamie Dimon sees some light at the end of the tunnel there certainly in regard to the supply chain stuff. So hopefully that will come to fruition.
Hill: Domino's third-quarter profits came in higher than expected but for the first time since 2011, same-store sales in the US were negative. Shares of Domino's down a bit this week, Maria, impressive streak, but it has come to an end.
Gallagher: Yes. U.S. same-store sales were down about 1.9%, still about over two years, it's up about 15%. Like you said, it beat expectations on earnings. [laughs] Strong international growth as well. It had a continuation of really healthy growth within their store openings. They've opened 323 stores in the quarter, 45 in the U.S., and 270 internationally. What I think is actually really interesting about this story, though, is a lot of the reasoning behind this decline that CEO Richard Allison said, was a shortage of workers and a decrease in spending due to stimulus checks. He said that they are actually in the toughest staffing environment they've seen in a really long time. Some stores have had to cut their hours. They are working on increasing wages, increasing investment in technology. I think that that's a trend we're going to see more and more with these businesses that mainly employ hourly, low-wage workers, that they're really needing to step up their wages and their benefits to encourage workers to go back. I'm going to be intrigued to see in this upcoming earnings season how many other similar companies talk about those constraints in terms of staffing?
Hill: You mentioned the store openings that they're doing. I think if you're a longtime Domino's shareholder, you've done quite well. As I said, the same-store sales growth streak is over but one of the many things that Domino's does well is picking new locations like their track record in terms of new locations that they then have to close is really impressive but I'm wondering if they gave any call about the next few months. Just because I look at this report, I think Halloween is in a couple of weeks. For all the talk of Super Bowl Sunday, Halloween is a really huge day for pizza.
Gallagher: He talked a little bit about trying to get more of those staffers back in that they are seeing a better staffing environment in the next couple of months, they have some new oven-baked dips that are out including a baked apple dip. So I think they are trying to lean into the fall festivities. They were trying to show positivity moving forward and not trying to really temper expectations moving forward. I think they were saying it was a blip and we're trying to get back to growth soon and they now have over 18,000 stores at the end of September. Like you said, they're really good in opening stores in good locations and they don't close them that often. I think it's a little bit of a blip, but hopefully not too big.
Hill: One tech giant is leaving China and one space stock is losing altitude. Details after the break. So stay right here. You're listening to Motley Fool Money. [MUSIC] Welcome back to Motley Fool Money. Chris Hill here with Maria Gallagher and Jason Moser. Shares of Virgin Galactic fell 15% on Friday after the company said it would delay its commercial space service to the end of 2022. Virgin Galactic says that it is taking more time to improve its space vehicles, which Maria, I have to believe future customers appreciate. But the fact of the matter is, at this moment, Virgin Galactic is losing the space race.
Gallagher: Yeah. They pushed it back about a month. Initially, they said quarter 3, 2022. Now they're guiding for quarter 4, 2022. I agree that if there's any group that I want to be prioritizing my safety it would be planes and large vehicles. I think that that's not going to hurt their customers too much. But I will say that when they did launch Unity 2022, their first space fight with a full crew, they got about 19 million views via livestream and third-party broadcast. People are still intrigued by this concept. People are still interested. I think people are still going to watch it even if full fight buyouts start at about $450,000. The amount of customers they have is still a pretty narrow window. But they actually really retained their prepaid customers. Not many people are dropping out due to these delays and they are reopening commercial pre-booking for flight. I'm curious to see how many people are going to sign up now that it seems a lot more possible. I feel like the past couple of years it's been this thing that might happen sometime soon and even just pushing it back a month. I do still think that by the end of 2022, this does seem like a real viable possibility. I'd be interested to see how many people sign up now that pre-booking is opening again.
Hill: It will be interesting to see once we get to actual operations and therefore actual results for Virgin Galactic. Because unfortunately for them, this happens just a couple of days after William Shatner goes up in Blue Origin and comes back and they get all of the attention. I understand the drop in this stock because Virgin Galactic has not yet earned the benefit of the doubt.
Gallagher: Yeah. I will say I don't know if you saw what William Shatner said when he came back down. He really raved about the flight, which I think I was someone who made fun of it a little bit and looks like it's just taking an airplane a little bit higher than most people take an airplane. [laughs] I wasn't too impressed by it. But he was so enthusiastic that I think it would make people who maybe weren't sure about it, make them more willing to go until maybe that they go on Virgin Galactic, maybe they go Blue Origin, but I do think he could be a good spokesperson for it.
Hill: Shopify is teaming up with Microsoft and Oracle to help merchants streamline their business operations. Jason, do I have this right, Shopify gets to invest further in their merchant businesses. Microsoft and Oracle get the chance to grow their cloud operations as they compete with AWS. That's how this looks. If that's the case, this seems like a win for everyone involved.
Moser: Yeah. I think you said it exactly. It is a win-win. I like this from a number of angles. I think for a business like Shopify, I'd love to see companies like Shopify and even Square (NYSE: SQ) to an extent, working on building the tools for merchants, particularly in regard to e-commerce. The numbers obviously are impressive when it comes to e-commerce. But I think when you consider Shopify, it's really impressive. To be honest, in 2020, Shopify held 8.6% of the U.S. retail e-commerce market. Now, that was second only to Amazon and their 39%. I think it shows you a couple of things there and that Shopify maintains an impressive presence already in our U.S. e-commerce market. They've picked up a lot of share very quickly. When you look at where Amazon is today, I think that really just demonstrates the opportunity that's still out in front for Shopify. When you see them doing things like this, you look at the tools that they continue to build -- Shop Pay integrations on Facebook (NASDAQ: FB) and Google properties. As e-commerce continues its shift to mobile, this experience is just going to have to get better and better. I think really that is going to be one of the benefits of this tie-up. Integrating these types of solutions with big partners like Microsoft and Oracle, it eliminates, I think, a layer of complexity. Again, it is a win for both of them as well in that they are getting a little bit more to the forefront in a market that historically is centered around AWS.
Hill: Now, I get that Shopify, when you look at it on the surface is not the cheapest stock in the world. But among other things, not that Shopify needed validation, but to strike a partnership like this with legacy tech giants like Oracle and Microsoft, it really seems like the runway is still there for the business and then therefore the stock.
Moser: Yeah. I'm glad you said something about the valuation because it is very easy to look at Shopify just on the surface and say, wow, this is a $175 billion company now go on something like 4 billion dollars in revenue. There is some disconnect there it would seem. But I think you go back to looking at that market opportunity. That's why we focus on those large and growing market opportunities because they represent just so much. It is just so much opportunity for them to capture. So yes, the market is pulling a lot of that forward. But when you see companies that really do dominate and help shape their respective spaces, we've seen this play out with companies like Amazon before. It just, you sit there all along the way saying it's too expensive, and then at some point 10 years down the road, you look back and you're kicking yourself because you never bought those shares. It's a good performance thus far for Shopify. But I think based on those numbers, that market opportunity, it's still out there. It strikes me as one that still has a ton of share to capture. Therefore shareholders, I think, who remain patient should do very well with this one through the years.
Hill: This week, Microsoft announced it is shutting down its LinkedIn operations in China. LinkedIn was the last major American social network operating in China, but Microsoft says the operating environment is more challenging. Maria, it seems like on some level, they just said, "You know what, this is no longer worth it for us."
Gallagher: Yeah. This comes after a Chinese internet regulator told LinkedIn to better moderate its content, gave it 36-day deadline. I think they said, it's too much should try and make it the same as LinkedIn. They are actually going to go back and launch a China-specific version of LinkedIn later this year. There will be no feeds, no ability to share a post, so no social aspect. It will just be more focused on job searching but China is LinkedIn's third-largest market and LinkedIn brings in about 10 billion in annual revenue to Microsoft. It's in their best interest to continue to have some presence in the country and try to monetize it the best way that they can. But I think the way it exists right now with such a social aspect just wasn't working for them but I also didn't realize one, that LinkedIn brought in that much revenue to Microsoft or how big it is. Throughout the world, LinkedIn has over 740 million members, over 55 million registered companies, 14 million open jobs listed on it, and three people are hired through LinkedIn every minute. It is one of the social medias that's really monetized well and shows a really strong use case for users to pay for it, both businesses and people searching for jobs. I thought that was pretty interesting to learn about. I think that it is definitely within their best interest to still have some presence. But I think pivoting and changing the social aspects is really they don't have much of a choice, it seems.
Hill: They don't have much of a choice. But also it seems like it could be a test that Microsoft might not have undertaken on their own. If they launch this in China and it doesn't have the social aspect, Microsoft may end up learning things about how this new version of LinkedIn works. Maybe it gives some insights into how do we improve it in other parts of the world?
Gallagher: Yeah, absolutely. Kind of a test case for seeing what part of the job market is that social interaction and messaging people after you interview with them or something like that and trying to connect with people versus how much of it is just finding the job and applying for it. I think that you're right, that could be a really interesting study for them to do to see how much of this value is in the social aspects, how much value is in the jobs aspect, and trying to make it more efficient worldwide after that.
Hill: Restaurant Brands International is the parent company of Burger King, Tim Hortons, and Popeyes Louisiana Kitchen. Shares are down a bit from their 52-week high, but that could change after next week. Popeyes will unveil a new hot sauce in partnership with Grammy award-winning artist Megan Thee Stallion. Yes, Megan Thee Stallion Hottie Sauce is going to debut on Oct. 19. Moser, this is part of a deal that includes new merchandise, philanthropic work in Houston, Texas. I like this. Not just because it's fun, but we've seen this business strategy work between McDonald's (NYSE: MCD) and musical acts like BTS and Travis Scott.
Moser: Yeah, I'm with you. I think that for whatever reason, these types of relationships, particularly when they pertain to food, they tend to work out very well. It's a matter of getting with the moment. What's that -- the zeitgeist? You want to be a part of that moment and clearly, Megan Thee Stallion is part of the moment that's happening right now. Popeye's and Megan Thee Stallion, to me it's just like chocolate peanut butter. This has the potential to be a Reese's Peanut Butter Cup success. I love these types of deals. Moreover, if I was someone who was asked to participate in something like this and they wanted to make a sauce after me, I would actually go barbecue rub, I would actually go rub. Dizzy Pig, if you're listening and you want to do a JMo rub, give me call.
Hill: Maria, 10 seconds. What are you partnering with if they come to you?
Gallagher: Oh, absolutely Ben and Jerry's. I would make an ice cream in one second and I'm a faithful buyer of all celebrities' Ben and Jerry's flavors.
Hill: [MUSIC] What should investors expect from Apple and Google next week? We'll get into that and more after the break. So stay right here. You're listening to Motley Fool Money. [MUSIC] Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Maria Gallagher. Time for a round of buy, sell, or hold. I'm going to spot you up with the topic. You tell me if that thing was a stock, would you buy, sell, or hold it? Maria, next week, Google is holding an event to unveil the latest upgrades to its mobile device. Buy, sell, or hold the Google Pixel phone.
Gallagher: I'm going to sell that really quickly. In 2020, [laughs] it only sold 7.2 million Pixel smartphones in the whole year, compared to Apple in quarter 4 sold 80 million iPhones and Samsung sold 62 million phones. Of all of the Google businesses, it's definitely the least interesting to me. Google's done 232 acquisitions since 2004. I think I'd pick a lot of them over the invention of the Google Pixel smartphone.
Hill: Although, Jason, if we're thinking about the Pixel phone as a stock, the market share it has is so tiny. Maybe it's a value stock or a [laughs] really deep value stock.
Moser: Or perhaps a value trap, Chris. [laughs] I am a total sell on this one. I agree with Maria. To me, the numbers just don't really add it up. At 7.2 million phones in the context of 1.5 billion smartphones sold globally in 2019. Clearly, this is immaterial. It does make you wonder, why do they still do it? I don't know necessarily. It seems to me the more valuable part of the business is in the operating system. The Android operating system gives them so much opportunity. I respect and appreciate the effort in wanting to produce a phone, but to me, it seems odd that Google, Alphabet, whatever you want to call it, they haven't really nailed it. Like Starbucks (NASDAQ: SBUX) hasn't nailed it on the food side. Google hasn't nailed it on the hardware side. You've got to start wondering if it's even really worth their time. But if they're getting incremental share then that's incremental share and just depends on how much it costs for them to continue with these types of initiatives. But yes, absolutely a sell. You'll never see me making any calls or firing off any tweets from a Pixel phone.
Hill: Maria, before we move on, just real quick to Jason's point. I am genuinely surprised that we're in what year 5 or 6 of this experiment for a business that is so successful in so many other ways. It makes me wonder how much longer the Pixel phone has before they just shut it down because at some point, they either need to get much more significant market share. I don't know if they just decided to throw money at this and cut the price so that they can get it into more hands or they need to just shut it down. Are they still doing this in three years?
Gallagher: I think when you have as much money as Alphabet has and you have as much power as Alphabet has, you have a lot of things that are in motion at all times. They can't all be winners and I think at some point, you just have to either accept it or you just have this part of the company that's just trucking along and it's not doing great, but it's still around. I feel like it might be one of those where enough people use it, maybe there are enough people who work in that part of the business that are passionate about it. Maybe they just keep it going or maybe they shut it down. I think for them it's so immaterial that it could go either way pretty easily.
Hill: Jason, the day before Google's event, Apple is having its own event to unveil new product updates, even though Apple just had an event like this last month. Buy, sell, or hold the future of tech company events like these.
Moser: Well, I must admit when you gave me this question, the first thing that went through my mind was the Widespread Panic song "Sell, Sell," because that's what I'm saying here, Chris, sell, sell. These events, I think, have jumped the shark personally. Now, I will say I understand why they're doing and I get it. It is obviously terrific marketing. It gives them a chance to control the narrative on whatever they are introducing. I do understand it, but it is so self-aggrandizing. To me it seems borderline narcissistic in some cases, the way they do these things. I much prefer just the under the radar or companies just keep on sneaking new innovations in front of us in changing the world without having necessarily to get into the spotlight and tell you how great they are because that's ultimately what these events feel like to me at this point. Perhaps they will reformat them or try a different way of distributing them. They can make them more creative and a little bit more enjoyable. But as it stands now, I want to watch these presentations less and less the more they announce them.
Hill: Yeah. Maria, it does seem like the more they do them, the less special they become. Do they need to go the route of just having like one in-person event per year and then just, I don't know, sending out videos otherwise. Are you like Jason, a hard sell on this one?
Gallagher: I'm going to go the opposite. I'm a buy, I think it's fine. I think I always like an event. I grew up my whole life doing theater, so I always loved the chance to see something dramatic happen. Especially the Apple ones, they always have the cool colors. I just think it's a fun way. I think it's smart to stoke excitement. I think it probably is useful for their marketing. They have a different vibe each time and you get people riled up, and then you get the excitement. I do think the more they do the less meaning may have, but I don't think I wonder when they've reached that point where they are now doing too many because I'm someone who I will still tune into a lot of them because I just think they are fun.
Hill: When is the car coming? Because like the rumored [laughs] Apple car seems like the product that is really ripe for a big event. If they are working on that, that's the event I want to see.
Moser: What do you think, Maria? I don't know anything about the car at this point.
Gallagher: I think it would be a very cool event. I would totally watch it. I think they have a really cool light show and they would drive it onto the stage. Or it would come up from the bottom at the stage with a fog machine.
Moser: I agree. I think a car could be a wow type of thing. Maybe that's it. It really needs to be something that focuses on something truly special. To me these things are just telling us about the next iteration of the MacBook or the iPad or the Watch or whatever it may be. It's just like whatever. Next. Give me something special and yeah, I'll be interested.
Hill: In 2014, CVS (NYSE: CVS) stopped selling tobacco products. This week Walgreens' (NASDAQ: WBA) CEO, Roz Brewer, said tobacco is "under real scrutiny at her company right now." Maria, buy, sell. or hold Walgreens quitting tobacco in the next six months.
Gallagher: I'm going to sell that idea just because it's so lucrative. I feel like realistically instead of completely stopping selling them, it'll be more like they'll add a label, add a different type of restriction. In 2019, they made it so only customers over the age of 21 could purchase slightly ahead of the federal guidelines changing. I think that even though they are trying to say that they are leaning more into their health and wellness-related merchandise. In 2017, 249 billion cigarettes were sold in the U.S. Even though it's decreasing it's such a lucrative business, I don't think that they're going to stop selling it completely, at least not in the next six months, maybe in the next couple of years. Do I want them to? I think that yes. Morally, I think that would be good, but I think it's just pretty lucrative business plan for them to completely cut it off.
Hill: Jason, you're buying this, selling, or holding?
Moser: Yeah. I'm going to take the other side of the coin here and buy. I think that you go back to the beginning of 2015, when CVS had phased out cigarettes from their stores. Now the stock hasn't really done all that well since then. That's a total return of around 4%. You look at Walgreen, it's interesting. It's even worse, down about 20%. I wouldn't attribute that performance necessarily getting rid of tobacco as much as just that's a difficult business. These are also two businesses that are evolving a bit, so to speak. Becoming more modern day healthcare companies and CVS with its acquisition of, what was it? Aetna. You see Walgreen going in that same direction as well. I think it's very difficult for a company to balance being a healthcare company while selling things that are clearly so detrimental to one's health. There is a blueprint out there for the way this has been done. Thanks to CVS. To me, it feels like this is a decision that's almost already been made. They're just trying to ease it out there as opposed to just being a headline that shows up in the news one day. To me, I think they will do it and I think long-term they won't suffer from it.
Hill: There is a blueprint that Walgreens can follow in terms of the way CVS did it, really pivoting and leaning into health. I will point out however, that that blueprint includes the fact that on the day CVS announced they were going to stop selling tobacco products, the stock fell 5%. Because to Maria's point, this is a lucrative part of the business. I think in CVS' case, it meant somewhere in the neighborhood of 2 billion dollars annually in terms of the front-of-store revenue. I think, Maria, it just comes down to, is Roz Brewer and her team at Walgreens willing to take that heat because they have to know it's coming. Don't they?
Gallagher: I think it is interesting to see as consumers get more and investors getting more invested in the idea of a company that does well and is not harming people with what they sell, I wonder how much they are taking that into account and trying to lean into maybe getting different types of investors into their stock or trying to make their company one that you can admire in that way, the way you do with some other companies like Costco (NASDAQ: COST) being an example of one. I think it will be interesting to see how much stake she puts in that and how much passion her and her team feel for that messaging and marketing.
Hill: Last month, the National Confectioners Association reported that retail sales of chocolate and candy, were more than 40% higher than last year, so Jason, buy, sell, or hold Halloween spending setting a record this year.
Moser: That's a strong buy, Chris and I'm helping the cause. [laughs] We have a standing rule here [laughs] in the Moser household, once Oct. 1 hits, we start buying the Halloween bags of candy, and that's just we have in our house, we are going to enjoy the entire month. Some people like to enjoy their birthday month, we like to enjoy each of the three holiday months, October, November, December, it's a great time of year. I think that honestly we're seeing folks are more and more feeling it's OK to get out there and do things like trick-or-treat or travel and whatnot. To me, I think there's going to be a little bit more enthusiasm behind this Halloween season and perhaps we've seen recently, and if I can help the cause at all, Chris, I certainly will. I have already got on the top and then we're going to go store later today and buy another bag of candy [laughs].
Hill: Maria.
Gallagher: I'm buying, I'm helping the cause, I have a lot of candy fun facts if anyone wants to hear them.
Hill: Lay them on me.
Gallagher: Americans purchase nearly 600 million pounds of candy a year for Halloween, 90 million pounds of chocolate candy is sold during Halloween week, which is more than Easter and Valentine's week, 10% of annual candy sales happen the days leading up to Halloween and the top-selling candy even though chocolate is more popular, the top-selling candy is actually candy corn, and there are 35 million pounds of candy corn produced each year, which is 9 billion pieces. [laughs] If the candy corn kernels [laughs] sold during Halloween were laid out end-to-end, they would circle the earth 4.5 times. Those are my candy facts.
Moser: Those are some very fun facts. Now that you mentioned it because we know Domino's benefits so greatly from Halloween, and that's one of their top five days of pizza sales, I wonder if you've laid each pizza out end-to-end, how many times that would go around the world?
Gallagher: I think that's an important thing we should probably try and figure out, as a team.
Hill: It would certainly taste better than the candy corn that's circling the globe, however many times.
Moser: Candy corn is very controversial item I'm coming to find. Through our shows and responses, that's a very controversial subject.
Hill: Let me just share this nugget in terms of retail spending, because the National Retail Federation believes that overall Halloween spending, so candy, but also costumes, decorations is going to set a record this year. It is going to be north of 10 billion dollars. One retail analyst said in response to that, "The National Retail Federation may actually be underestimating willingness to spend. This means that the biggest risk to Halloween spending in 2021 is not consumer confidence at this point, it is continued supply chain disruptions and the availability of merchandise to meet consumer demand." Jason, we've been talking about people needing to start their holiday shopping earlier this year. I usually do my candy shopping a few days before Halloween, based on this quote, maybe I need to get out there now.
Moser: I think you need to take a page from the JMo playbook and just start your candy shopping Oct. 1, [laughs] like you are really embracing the holiday. I think you're right. I think it's a good point we saw, you're just going back to those bank results. Bank of America, the deposit number, the 15% growth on the deposits, we're just at a point right now where consumers are still at a pretty good financial place, and credit cards are doing well. I think you're right. It's going to be less about the consumer's ability to spend. It's going to be more about just having stuff to actually spend it on.
Hill: Last thing before we go to the break, Maria, I'm sorry to put you on the spot, but we are talking about supply chain disruptions. It's a big theme this year, certainly over the last few weeks on this show, with so many companies talking about it. During our production meeting this morning, you mentioned that you have a Halloween customer idea that's built around that theme and I'd love it if you could share with the dozens of listeners.
Gallagher: Well, listeners, if you decide to do this as well, let me now, but I decided that I want to be the boat that blocked the Suez Canal for Halloween. [laughs] Then, I think it would be very funny to block everyone when they're trying to go places and just say, I'm sorry, I'm stuck, and I think that would be really funny. I don't know if I'm going to actually do it, but it's my idea.
Moser: It's a strong buy. It's a strong, high-conviction buy, I love that idea.
Gallagher: Thank you. [MUSIC]
Hill: Radar stocks coming up after the break, so stay right here. You're listening to Motley Fool Money. [MUSIC] As always, people on the program may have interest in the stocks they talk about on The Motley Fool, may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here with Maria Gallagher and Jason Moser. Time to get to the stocks on our radar, our man behind the glass, Dan Boyd is going to hit you with a question, but first, Dan, we were talking earlier in the show about the upcoming promotion from Popeyes the partnership with Megan Thee Stallion. You're someone who does a decent amount of boots-on-the-ground research at Popeyes. I'm curious, are you excited about this new partnership?
Dan Boyd: There is never not a moment in my life, Chris, where I am not excited for Popeyes. The idea that [laughs] I could get Popeyes will bring me out of depression, it will get me up in the morning. I am always ready for some Louisiana fried chicken.
Hill: Are you going to get the new sauce?
Boyd: I'll try it. Yeah, I love Megan Thee Stallion, I think she's great, I think her songs are great and anything they can do to shake-up that menu up there, I'm always here for.
Hill: Let's get through some radar stocks. Jason Moser, you're up first, what are you looking at this week?
Moser: Yeah, just taking a closer look at Marvell, ticker MRVL, the recent investor day, the term 5G was mentioned 34 times and I really do feel like this is an excellent way to play that 5G movement, a pure-play 5G idea. The growth is really being driven by three key markets for the business, cloud, 5G, and automotive. All three growing better than 20% annually represent a tremendous opportunity for the business. You remember they had a recent acquisition of Inphi, which was the company I had recommended a little while back. I think that will provide some nice tailwinds and they have another acquisition of smaller one of Inovium, and that will give them additional networking solutions for cloud and edge data centers. Ultimately, that's what this business has done thanks to CEO Matt Murphy. They've had this vision to transform Marvell from a consumer-oriented business to an infrastructure-oriented company, and this vision is starting to bear fruit, so I think at around 45 or so times full-year fiscal estimates right now, to me, it seems like a very reasonable price in a market where a lot of valuation seem maybe a bit frothy [laughs].
Hill: Dan, question about Marvell?
Boyd: I can't think about Marvell without thinking about Marvel obviously. Jason, I have a speculative question for you, how many semiconductors are used in the production of a Marvel movie?
Moser: Business cards have thousands, I'd have to believe there will be hundreds of thousands of chips involved with the production of something like that. But that's just a wag as we call it in the business, a wild you-know-what guess.
Boyd: Thanks, Jason.
Hill: Maria Gallagher, what are you looking at this week?
Maria Gallagher: I have reached the age where all my free time is spent looking at homes I can't afford on Zillow, I mean, looking at these estimates. I'm going to spend a little bit more time looking at Zillow Group and trying to understand the dynamics of their iBuying business, I think is really fascinating. Them buying your house then flipping it, and understanding the margins of that and the risks associated with that as well. I think those trends will be really interesting to watch.
Hill: The ticker symbol?
Gallagher: ZG.
Hill: Dan, question about Zillow Group?
Boyd: I am a Zillow shareholder, which is great because it's rare on this show when I actually get to be that for radar stocks. But I bought a house in 2019, and so what I do Maria, is I am glued to the Zillow estimate of my house, whereas I'm not looking for a new house because I can't afford two houses, but when Zillow tells me how much they think my house is worth, I get very excited [laughs].
Gallagher: You sound like my mom. She likes to email my sister links to Zillow estimates for apartments near her to convince her to move to my mom's building. [MUSIC]
Hill: What do you want to add to your watch list, Dan?
Boyd: Like I said, I already have Zillow here in my portfolio, so I'm going to go with Marvell.
Hill: Jason Moser, Maria Gallagher, thanks so much for being here.
Gallagher: Thanks for having us.
Hill: That's going to do it for this week show, we'll see you in next week.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Chris Hill owns shares of Alphabet (A shares), Amazon, Apple, Costco Wholesale, JPMorgan Chase, Microsoft, Shopify, Square, and Starbucks. Jason Moser owns shares of Alphabet (C shares), Amazon, Apple, Shopify, Square, and Starbucks. Maria Gallagher owns shares of Square and Virgin Galactic Holdings Inc. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Costco Wholesale, Facebook, Microsoft, Shopify, Square, Starbucks, Zillow Group (A shares), and Zillow Group (C shares). The Motley Fool recommends CVS Health, Domino's Pizza, Marvell Technology Group, and Restaurant Brands International Inc. and recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2023 $1,140 calls on Shopify, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, short January 2023 $1,160 calls on Shopify, short March 2023 $130 calls on Apple, and short October 2021 $120 calls on Starbucks. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | But if they're getting incremental share then that's incremental share and just depends on how much it costs for them to continue with these types of initiatives. Gallagher: I think it is interesting to see as consumers get more and investors getting more invested in the idea of a company that does well and is not harming people with what they sell, I wonder how much they are taking that into account and trying to lean into maybe getting different types of investors into their stock or trying to make their company one that you can admire in that way, the way you do with some other companies like Costco (NASDAQ: COST) being an example of one. Hill: Let me just share this nugget in terms of retail spending, because the National Retail Federation believes that overall Halloween spending, so candy, but also costumes, decorations is going to set a record this year. | The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Costco Wholesale, Facebook, Microsoft, Shopify, Square, Starbucks, Zillow Group (A shares), and Zillow Group (C shares). But if they're getting incremental share then that's incremental share and just depends on how much it costs for them to continue with these types of initiatives. Gallagher: I think it is interesting to see as consumers get more and investors getting more invested in the idea of a company that does well and is not harming people with what they sell, I wonder how much they are taking that into account and trying to lean into maybe getting different types of investors into their stock or trying to make their company one that you can admire in that way, the way you do with some other companies like Costco (NASDAQ: COST) being an example of one. | Gallagher: I think it is interesting to see as consumers get more and investors getting more invested in the idea of a company that does well and is not harming people with what they sell, I wonder how much they are taking that into account and trying to lean into maybe getting different types of investors into their stock or trying to make their company one that you can admire in that way, the way you do with some other companies like Costco (NASDAQ: COST) being an example of one. But if they're getting incremental share then that's incremental share and just depends on how much it costs for them to continue with these types of initiatives. Hill: Let me just share this nugget in terms of retail spending, because the National Retail Federation believes that overall Halloween spending, so candy, but also costumes, decorations is going to set a record this year. | But if they're getting incremental share then that's incremental share and just depends on how much it costs for them to continue with these types of initiatives. Gallagher: I think it is interesting to see as consumers get more and investors getting more invested in the idea of a company that does well and is not harming people with what they sell, I wonder how much they are taking that into account and trying to lean into maybe getting different types of investors into their stock or trying to make their company one that you can admire in that way, the way you do with some other companies like Costco (NASDAQ: COST) being an example of one. Hill: Let me just share this nugget in terms of retail spending, because the National Retail Federation believes that overall Halloween spending, so candy, but also costumes, decorations is going to set a record this year. | null |
14,006 | 626,170 | 2021-10-17 00:00:00 UTC | 3 Stocks That Can Beat Supply Chain Disruptions | COST | https://www.nasdaq.com/articles/3-stocks-that-can-beat-supply-chain-disruptions-2021-10-17 | null | null | Turn on thefinancial news and a topic you'll most likely hear about is the status of the global supply chain. The unexpected surge in consumer demand following the depths of the pandemic in 2020 has caused shipping delays, labor shortages, and inflation. As investors, it can be difficult to make sense of it all.
Luckily, a team of Motley Fool contributors has identified three top stocks to consider that can handle the pressing supply chain challenges. Find out why they think Expedia Group (NASDAQ: EXPE), Home Depot (NYSE: HD), and Walmart (NYSE: WMT) are good long-term bets.
Image source: Getty Images.
Fly away with this high-potential stock
Eric Volkman (Expedia Group): Several corners of the travel industry might be struggling at the moment -- hello, Southwest Airlines! -- but by and large these difficulties aren't due to the global supply headaches. Meanwhile, the anticipated big-time recovery in the sector, which was widely expected to kick in several months ago as the coronavirus pandemic seemed to be receding, is now right in front of us.
So a good play on these dynamics is top online travel agency Expedia Group, which as a stock has been showing new signs of life recently. That should roll on, as delta variant coronavirus cases and deaths continue to drop, and travel restrictions are eased.
Many would-be travelers didn't get a sufficient window of opportunity to venture out of their homes between the original decline in cases and deaths earlier this year and the rise of the delta variant. The persistence of delta has bottled up demand even more; one can imagine bookings for flights, hotels, tours, etc. will explode when the world opens up.
Also, travel is a bug that tends to produce a lifetime fever. So, many first-time or relatively inexperienced travelers will become more habitual voyage-takers (and returning Expedia customers) as they get opportunities in the future.
These dynamics provide much room for recovery and improvement. In the second quarter of 2019, before the pandemic, Expedia's gross bookings totaled over $28 billion, from which it rang up nearly $3.2 billion in revenue. In the same quarter this year, those tallies were a respective $20.8 billion and $2.1 billion.
I think that hunger for travel is stronger than many investors realize. Consequently OTA travel king Expedia could not only rise to those pre-pandemic numbers before long, but exceed them handsomely.
Many analysts tracking the company agree. On average, according to data compiled by Yahoo! Finance, they're anticipating that Expedia will post its second-highest annual revenue figure of all time in 2022 (almost $11.5 billion, not far from current record holder 2019's $12 billion and change).
And their estimate for adjusted earnings per share? A cool $6.58, which tops banner 2019's $6.15.
Regardless of whether supply chain disruptions persist or perish, formerly shut-in people with cash to spend will find a way to travel. Expedia is one of the top companies helping them to do so, and as such it's poised to be a real winner of a stock in the near future.
Taking advantage of scale in the home improvement space
Neil Patel (Home Depot): With a market capitalization exceeding $360 billion and trailing-12-month sales of $144.4 billion, Home Depot is one of the largest businesses around. This sheer size is a big reason why it's able to deal with the current situation.
Thanks to investments the company has made over the years, Home Depot's One Supply Chain is passing the real-life stress test of the past few months in flying colors. Management's primary objective right now is to focus on maintaining enough inventory of the most in-demand SKUs, which include products that its professional (or Pro) customers really need, like lumber, building materials, and electrical and plumbing fixtures. Growth of the Pro customer group outpaced that of DIYers for the past two quarters, so keeping up with this demand is hugely important.
In order to completely bypass the issues other companies are facing, Home Depot took matters into its own hands. "Our supply chain teams recently leveraged our scale and flexibility to arrange for several container vessels for our exclusive use," chief operating officer Ted Decker highlighted on the Q2 earnings call. Home Depot's financial strength, supported by an operating margin of 37.5%, a net income margin of 12.6%, and an interest coverage ratio (earnings before interest and taxes divided by interest expense) of 20, provide significant room to handle any short-term issues. And it clearly allows the business to afford excess capacity.
Over the past year, Home Depot grew sales by 8.1% and inventories by 40%. The company's ability to stock up on merchandise at a faster rate than revenue, particularly in this type of economic environment when moving goods through the supply chain has proven very difficult, is a nod to Home Depot's operational excellence.
The leading home improvement chain makes for a case study in how to deal with these disruptions.
More concentrated than you think
Jeremy Bowman (Walmart): Supply chain woes are hammering retailers across the board as a combination of factory shutdowns, shipping delays, COVID-19-related issues, and labor shortages are making it harder than ever for retailers to keep their stores stocked.
As the world's largest retailer, Walmart isn't immune from the supply chain crunch, but it has a number of advantages that make it less vulnerable to the global supply chain slowdown than you might think.
First, because of its size, Walmart has significant economies of scale, meaning it's better equipped to manage challenges like these than smaller retailers. Suppliers want to maintain strong relations with Walmart so they're likely to favor it over independent retailers if they have limited inventory, and Walmart's size and balance sheet mean it can make sacrifices that smaller competitors may not be able to.
Second, though Walmart is a diversified retailer, selling things like clothing, home goods, and electronics, a majority of its sales comes from groceries, which are less sensitive to the supply chain challenges for several reasons. Everybody needs to eat, after all, and if one brand's product is out of stock, consumers will likely just substitute another.
Finally, Walmart and other large retailers like Costco Wholesale and Home Depot are taking it upon themselves to make sure they have adequate inventory by chartering their own container ships. It's an expensive option, but a smart one to ensure that in-demand merchandise is in stock, especially with the holiday season coming up. That, again, is something only large retailers do.
The supply chain woes are an industrywide problem, and Walmart's size and competitive strength give it an opportunity to pick up market share during a challenging time.
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Eric Volkman has no position in any of the stocks mentioned. Jeremy Bowman has no position in any of the stocks mentioned. Neil Patel has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale and Home Depot. The Motley Fool recommends Southwest Airlines. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Finally, Walmart and other large retailers like Costco Wholesale and Home Depot are taking it upon themselves to make sure they have adequate inventory by chartering their own container ships. The Motley Fool owns shares of and recommends Costco Wholesale and Home Depot. Management's primary objective right now is to focus on maintaining enough inventory of the most in-demand SKUs, which include products that its professional (or Pro) customers really need, like lumber, building materials, and electrical and plumbing fixtures. | Finally, Walmart and other large retailers like Costco Wholesale and Home Depot are taking it upon themselves to make sure they have adequate inventory by chartering their own container ships. The Motley Fool owns shares of and recommends Costco Wholesale and Home Depot. Find out why they think Expedia Group (NASDAQ: EXPE), Home Depot (NYSE: HD), and Walmart (NYSE: WMT) are good long-term bets. | Finally, Walmart and other large retailers like Costco Wholesale and Home Depot are taking it upon themselves to make sure they have adequate inventory by chartering their own container ships. The Motley Fool owns shares of and recommends Costco Wholesale and Home Depot. Taking advantage of scale in the home improvement space Neil Patel (Home Depot): With a market capitalization exceeding $360 billion and trailing-12-month sales of $144.4 billion, Home Depot is one of the largest businesses around. | Finally, Walmart and other large retailers like Costco Wholesale and Home Depot are taking it upon themselves to make sure they have adequate inventory by chartering their own container ships. The Motley Fool owns shares of and recommends Costco Wholesale and Home Depot. Taking advantage of scale in the home improvement space Neil Patel (Home Depot): With a market capitalization exceeding $360 billion and trailing-12-month sales of $144.4 billion, Home Depot is one of the largest businesses around. | null |
14,007 | 626,172 | 2021-10-16 00:00:00 UTC | Retailers Chartering Their Own Supply Ships May Not Stop Shortages This Christmas | COST | https://www.nasdaq.com/articles/retailers-chartering-their-own-supply-ships-may-not-stop-shortages-this-christmas-2021-10 | null | null | When even the White House no longer sugarcoats the supply chain crisis and warns "there will be things that people can't get" for Christmas, you know the situation is going from bad to worse.
The congestion and bottlenecks at the busiest ports are so severe that some of the biggest retailers are chartering their own ships to bring in their merchandise from overseas, despite pricing for charters being at record levels.
Image source: Getty Images.
Most of the retailers are reserving ships for relatively short periods, seemingly just trying to get through the Christmas season, but Dollar Tree (NASDAQ: DLTR) seems to think the problem may be much worse, as it has entered into shipping contracts until 2024.
Although some analysts say that move unnecessarily ties the discounter to high-cost charters well beyond when the situation should have eased, president and CEO Mike Witynski told analysts it believes its regular carriers will be able to fulfill only 60% to 65% of their commitments.
So is the deep discounter onto something, and are the others due to find themselves in the same situation in the future? Or is this a transitory issue that will sort itself out in due course? There's good reason to believe the dollar-store chain may be right.
Image source: Getty Images.
Trying an end run around the bottlenecks
The Port of Los Angeles is the world's largest port, some 43 miles long and 8,000 acres in size. Last year it moved more than 9.3 million twenty-foot equivalent units, that being roughly the size of a typical intermodal container. About half a million containers are currently waiting to be offloaded from cargo ships at the port.
Flareups of coronavirus in Asia have disrupted the supply chain as new lockdowns are imposed, but retailers can't wait. From Costco (NASDAQ: COST) and Home Depot (NYSE: HD) to Party City (NYSE: PRTY) and Walmart (NYSE: WMT), major retailers are attempting to ensure distribution centers and stores are fully stocked with merchandise for the holiday season by contracting for their own container ships. IKEA is even buying its own containers.
Where the typical container ship can hold around 20,000 containers, the ships the retailers are getting are much smaller, carrying only around 1,000 containers, though they are usually about twice as expensive to charter.
According to industry site Freightos, the global container freight index rose from $2,232 last year to almost $10,000 this year while the index for the China/East Asia route to North America's west coast went from $3,847 in 2020 to over $16,000 today. While prices have eased in recent days, rates remain extraordinarily inflated.
Image source: Getty Images.
A monster truck jam
Yet shipping is only part of the problem. For the containers to be offloaded, a conga line of trucks must be ready to take the goods from port to locations across the country. Some 73% of all goods are transported by truck, but the nation is also caught in the grip of a truck driver shortage that threatens the nation's supply chain as well.
This is a separate crisis that has been building for years. The American Trucking Association warned in 2018 there was a shortage of 51,000 drivers, and that shortage only worsened after the pandemic struck. The ATA now predicts the industry will need 174,000 truck drivers by 2026.
Trucking giant Old Dominion Freight Line (NASDAQ: ODFL) recently held a job fair where it said it was willing to hire new long-haul drivers, regardless of whether they had experience or not. Trucking companies offering hiring bonuses of as much as $20,000 are not uncommon.
The ripple effect will continue hurting supply chains across the country and across all industries. Retailers are hoping that by chartering their own ships they'll be able to bypass the congested ports and offload their goods at less busy ones, but they still might encounter logjams because of the driver shortage and end up creating backlogs elsewhere.
The New York Times says 80,000 containers are now waiting to be moved out of the Port of Savannah in Georgia, some 50% more than usual. It calculates that about 13% of "the world's cargo shipping capacity is tied up by delays."
No easy way out
Analysts are optimistic the traffic jam at the ports can be cleared up by late 2022 or early 2023, but the deepening trucking crisis could very well extend the logjam even further.
It may be costing Dollar Tree more to lock in these high rates for what seems like such a long time, but the discount chain may be the most prudent retailer to lock in today's charter rate. Consumers, though, may be the ones most disappointed after they see just how barren store shelves become.
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Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale, Home Depot, and Old Dominion Freight Line. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Although some analysts say that move unnecessarily ties the discounter to high-cost charters well beyond when the situation should have eased, president and CEO Mike Witynski told analysts it believes its regular carriers will be able to fulfill only 60% to 65% of their commitments. From Costco (NASDAQ: COST) and Home Depot (NYSE: HD) to Party City (NYSE: PRTY) and Walmart (NYSE: WMT), major retailers are attempting to ensure distribution centers and stores are fully stocked with merchandise for the holiday season by contracting for their own container ships. It may be costing Dollar Tree more to lock in these high rates for what seems like such a long time, but the discount chain may be the most prudent retailer to lock in today's charter rate. | From Costco (NASDAQ: COST) and Home Depot (NYSE: HD) to Party City (NYSE: PRTY) and Walmart (NYSE: WMT), major retailers are attempting to ensure distribution centers and stores are fully stocked with merchandise for the holiday season by contracting for their own container ships. Although some analysts say that move unnecessarily ties the discounter to high-cost charters well beyond when the situation should have eased, president and CEO Mike Witynski told analysts it believes its regular carriers will be able to fulfill only 60% to 65% of their commitments. It may be costing Dollar Tree more to lock in these high rates for what seems like such a long time, but the discount chain may be the most prudent retailer to lock in today's charter rate. | From Costco (NASDAQ: COST) and Home Depot (NYSE: HD) to Party City (NYSE: PRTY) and Walmart (NYSE: WMT), major retailers are attempting to ensure distribution centers and stores are fully stocked with merchandise for the holiday season by contracting for their own container ships. Although some analysts say that move unnecessarily ties the discounter to high-cost charters well beyond when the situation should have eased, president and CEO Mike Witynski told analysts it believes its regular carriers will be able to fulfill only 60% to 65% of their commitments. It may be costing Dollar Tree more to lock in these high rates for what seems like such a long time, but the discount chain may be the most prudent retailer to lock in today's charter rate. | Although some analysts say that move unnecessarily ties the discounter to high-cost charters well beyond when the situation should have eased, president and CEO Mike Witynski told analysts it believes its regular carriers will be able to fulfill only 60% to 65% of their commitments. From Costco (NASDAQ: COST) and Home Depot (NYSE: HD) to Party City (NYSE: PRTY) and Walmart (NYSE: WMT), major retailers are attempting to ensure distribution centers and stores are fully stocked with merchandise for the holiday season by contracting for their own container ships. It may be costing Dollar Tree more to lock in these high rates for what seems like such a long time, but the discount chain may be the most prudent retailer to lock in today's charter rate. | null |
14,008 | 626,175 | 2021-10-15 00:00:00 UTC | Inflation is Back. Are Your Investments Ready? | COST | https://www.nasdaq.com/articles/inflation-is-back.-are-your-investments-ready-2021-10-15 | null | null | The annual inflation rate hovered below 2.5% for the entire 2010s, but it increased to over 5% in summer 2021 is likely here to stay. Average costs are rising significantly for the first time in many people's investing careers, and some investments will respond better than others. By following these three tips, your portfolio will be ready for continued inflation throughout the 2020s.
Source: Getty Images
1. Pick stocks that benefit from inflation
Behind every stock, there is a company with a business model that inflation impacts differently. Companies that will benefit from inflation can successfully pass their costs on to the consumer, such as Apple or Amazon. People are still lining up to a buy new iPhones and ordering things on Amazon Prime, and these megacap companies don't feel the woes of inflation like others.
For those who want access to stocks but are concerned about high volatility, two sectors generally respond well to inflation. Basic materials companies provide the world with what they need, whether it's through manufacturing, mining, paper, chemicals, or metals. Consumer staples stocks are items that consumers will continue buying during a recession, such as food, beverages, and household products.
One company that stands out in this space is Costco (NASDAQ: COST), which uses its Kirkland brand to manufacture goods affordably, enabling lower customer costs and maintaining 90% customer loyalty. With 100 million memberships and a growing online presence, it is well positioned for a higher-inflation environment. Costco can keep costs relatively low, and customers will likely remain loyal through modest price increases.
In contrast, earlier-stage companies can have a tougher time. They often are spending generously to acquire users and focusing on long-term growth before profits. These companies must now pay higher prices for the same services, and may not have earn sustainable revenue to grow as they would when inflation was under 2%.
The gaming-meets-gambling company Skillz (NYSE: SKLZ) is down 50% off its peak earlier this year. It is still in customer acquisition mode, and the company reported an $80 million loss last quarter, four times larger than a year before. While the company still has long-term growth potential, it is facing an uphill battle in the short-term since it must spend to acquire customers, and faces higher prices with inflation.
2. Invest in other asset classes
Outside of traditional stocks, there are plentiful opportunities to hedge your portfolio. Traditionally, gold often performs well during high inflation. Because the supply of gold increases slowly, the price rises when investors flock to the safe haven asset. Because most people won't buy physical gold, the SPDR Gold Trust ETF (NYSE: GLD) is a popular, relatively inexpensive way to buy it.
Investors have started picking a less traditional hedge too in cryptocurrency. Using the same logic around a finite supply, cryptos may increase in demand as investors look for uncorrelated investments to the rest of their portfolio. While the low risk of stablecoins may sound appealing, those will lose purchasing power with inflation as the US dollar to which their price is pegged becomes less valuable. While volatile, a small allocation to Bitcoin (CRYPTO: BTC) or Ethereum (CRYPTO: ETH) serves an uncorrelated hedge to a stock portfolio, with larger potential to appreciate than gold.
3. Buy TIPS instead of fixed-rate bonds
High inflation significantly weakens your purchasing power -- how much your money can buy. While fixed rate bonds and CDs offer safety and little risk for your savings, they can't keep up with high inflationary environments. Investors holding onto these bonds will lose purchasing power, since whatever these investments pay in interest will probably remain well below inflation.
A nice alternative is buying TIPS instead of traditional bonds. As the "Treasury Inflation Protected Securities" name suggests, these bonds adjust their coupon payments to protect investors from inflationary risk. With inflation coming back, these are a better choice than fixed rate investments.
Higher inflation is coming, but you shouldn't view it as a cost. It's an opportunity make sure your portfolio has uncorrelated investments that can perform well during inflation. Examine and diversify your portfolio, ensuring that each position can withstand high inflation and is uncorrelated to your other investments. Whether you're buying public stocks or a nontraditional investment, you can find great choices that are poised to profit over the next decade.
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Fool contributor David Smith owns shares of Apple, Amazon, Skillz, and Costco and has a position in Bitcoin. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. The Motley Fool owns shares of and recommends Amazon, Apple, Bitcoin, Costco Wholesale, Ethereum, and Skillz Inc. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Average costs are rising significantly for the first time in many people's investing careers, and some investments will respond better than others. Companies that will benefit from inflation can successfully pass their costs on to the consumer, such as Apple or Amazon. One company that stands out in this space is Costco (NASDAQ: COST), which uses its Kirkland brand to manufacture goods affordably, enabling lower customer costs and maintaining 90% customer loyalty. | See the 10 stocks Stock Advisor returns as of 6/15/21 Fool contributor David Smith owns shares of Apple, Amazon, Skillz, and Costco and has a position in Bitcoin. The Motley Fool owns shares of and recommends Amazon, Apple, Bitcoin, Costco Wholesale, Ethereum, and Skillz Inc. Average costs are rising significantly for the first time in many people's investing careers, and some investments will respond better than others. | See the 10 stocks Stock Advisor returns as of 6/15/21 Fool contributor David Smith owns shares of Apple, Amazon, Skillz, and Costco and has a position in Bitcoin. Average costs are rising significantly for the first time in many people's investing careers, and some investments will respond better than others. Companies that will benefit from inflation can successfully pass their costs on to the consumer, such as Apple or Amazon. | Higher inflation is coming, but you shouldn't view it as a cost. Average costs are rising significantly for the first time in many people's investing careers, and some investments will respond better than others. Companies that will benefit from inflation can successfully pass their costs on to the consumer, such as Apple or Amazon. | null |
14,009 | 626,176 | 2021-10-14 00:00:00 UTC | Noteworthy Thursday Option Activity: CPRI, COST, WGO | COST | https://www.nasdaq.com/articles/noteworthy-thursday-option-activity%3A-cpri-cost-wgo-2021-10-14 | null | null | Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Capri Holdings Ltd (Symbol: CPRI), where a total of 12,103 contracts have traded so far, representing approximately 1.2 million underlying shares. That amounts to about 80.7% of CPRI's average daily trading volume over the past month of 1.5 million shares. Particularly high volume was seen for the $62 strike call option expiring November 05, 2021, with 3,754 contracts trading so far today, representing approximately 375,400 underlying shares of CPRI. Below is a chart showing CPRI's trailing twelve month trading history, with the $62 strike highlighted in orange:
Costco Wholesale Corp (Symbol: COST) options are showing a volume of 15,751 contracts thus far today. That number of contracts represents approximately 1.6 million underlying shares, working out to a sizeable 79.5% of COST's average daily trading volume over the past month, of 2.0 million shares. Particularly high volume was seen for the $450 strike call option expiring October 15, 2021, with 576 contracts trading so far today, representing approximately 57,600 underlying shares of COST. Below is a chart showing COST's trailing twelve month trading history, with the $450 strike highlighted in orange:
And Winnebago Industries, Inc. (Symbol: WGO) saw options trading volume of 3,724 contracts, representing approximately 372,400 underlying shares or approximately 79.1% of WGO's average daily trading volume over the past month, of 470,980 shares. Particularly high volume was seen for the $70 strike put option expiring November 19, 2021, with 1,743 contracts trading so far today, representing approximately 174,300 underlying shares of WGO. Below is a chart showing WGO's trailing twelve month trading history, with the $70 strike highlighted in orange:
For the various different available expirations for CPRI options, COST options, or WGO options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Particularly high volume was seen for the $450 strike call option expiring October 15, 2021, with 576 contracts trading so far today, representing approximately 57,600 underlying shares of COST. Below is a chart showing CPRI's trailing twelve month trading history, with the $62 strike highlighted in orange: Costco Wholesale Corp (Symbol: COST) options are showing a volume of 15,751 contracts thus far today. That number of contracts represents approximately 1.6 million underlying shares, working out to a sizeable 79.5% of COST's average daily trading volume over the past month, of 2.0 million shares. | Below is a chart showing CPRI's trailing twelve month trading history, with the $62 strike highlighted in orange: Costco Wholesale Corp (Symbol: COST) options are showing a volume of 15,751 contracts thus far today. Below is a chart showing COST's trailing twelve month trading history, with the $450 strike highlighted in orange: And Winnebago Industries, Inc. (Symbol: WGO) saw options trading volume of 3,724 contracts, representing approximately 372,400 underlying shares or approximately 79.1% of WGO's average daily trading volume over the past month, of 470,980 shares. That number of contracts represents approximately 1.6 million underlying shares, working out to a sizeable 79.5% of COST's average daily trading volume over the past month, of 2.0 million shares. | Below is a chart showing COST's trailing twelve month trading history, with the $450 strike highlighted in orange: And Winnebago Industries, Inc. (Symbol: WGO) saw options trading volume of 3,724 contracts, representing approximately 372,400 underlying shares or approximately 79.1% of WGO's average daily trading volume over the past month, of 470,980 shares. Below is a chart showing CPRI's trailing twelve month trading history, with the $62 strike highlighted in orange: Costco Wholesale Corp (Symbol: COST) options are showing a volume of 15,751 contracts thus far today. That number of contracts represents approximately 1.6 million underlying shares, working out to a sizeable 79.5% of COST's average daily trading volume over the past month, of 2.0 million shares. | Below is a chart showing COST's trailing twelve month trading history, with the $450 strike highlighted in orange: And Winnebago Industries, Inc. (Symbol: WGO) saw options trading volume of 3,724 contracts, representing approximately 372,400 underlying shares or approximately 79.1% of WGO's average daily trading volume over the past month, of 470,980 shares. Below is a chart showing WGO's trailing twelve month trading history, with the $70 strike highlighted in orange: For the various different available expirations for CPRI options, COST options, or WGO options, visit StockOptionsChannel.com. Below is a chart showing CPRI's trailing twelve month trading history, with the $62 strike highlighted in orange: Costco Wholesale Corp (Symbol: COST) options are showing a volume of 15,751 contracts thus far today. | null |
14,010 | 626,177 | 2021-10-13 00:00:00 UTC | Here's Why Costco Can Continue Its Growth Streak | COST | https://www.nasdaq.com/articles/heres-why-costco-can-continue-its-growth-streak-2021-10-13 | null | null | Costco Wholesale (NASDAQ: COST) capped off fiscal 2021 on a high note, with fourth-quarter revenue rising 17.4% year over year. This increase is well above the consistent high-single-digit growth that Costco delivered before the pandemic.
Costco's membership renewal rates are trending up despite supply issues impacting the retail industry, as consumers seek more value in this inflationary and unpredictable environment. As a result, this deal rush could point to sustained demand in the near term. The only problem is whether Costco can keep the shelves stocked amid supply shortages to meet shoppers' demand through the holidays.
Image source: Getty Images.
Delivering value at the right time
The retail industry has got a lot to deal with right now. Seaports are congested, freight costs are on the rise, and low inventory levels cause more items to be out of stock than normal. Costco is passing some of these costs on to the customer, but the company still keeps prices down on many items, which could help it gain market share in this tight environment.
Costco reported that its membership renewal rate inched up to 91.3% in the U.S. and Canada for an increase of 0.3 percentage points over fiscal Q3. The worldwide renewal rate also rose by the same amount to 88.7%. This increase stems from higher penetration of its top-tier executive memberships, in addition to improving renewal rates from first-year members.
Executive members spend $120 annually to shop at Costco, and these customers shop more frequently than other members. Stronger renewal rates should lead to higher demand in the near term.
Costco reported a stellar comparable-sales growth rate of 13.4% for fiscal 2021, excluding gas and currency fluctuation from international sales. This figure speaks volumes about the value Costco is adding for customers, not just in terms of price but also the availability of products relative to its competitors. For example, Costco is stocking toys earlier for the holidays as part of an effort to keep its warehouses full, and it has already chartered three ocean vessels to transport goods between Asia and North America for next year. At the same time, it's selling out of certain items within weeks of getting them in stock.
The high demand helped Costco maintain a healthy operating margin last quarter, with operating profit up 17.9% year over year. This only strengthens the business financially, giving it an edge over other retailers that don't have the resources to acquire new inventory ahead of the holidays.
Rising inflation is generally going to drive consumers to seek value for essential items, and this is clearly good news for Costco. The increase in the Consumer Price Index in recent months correlates with a small acceleration in Costco's comp sales from July through September, excluding gas and foreign currency. Comp sales were up 8% in July, 9.1% in August, and 9.4% in September.
Costco is in a great position
Investors shouldn't expect Costco to continue growing at double-digit levels permanently. After all, Costco's adjusted comp sales have already decelerated from 15.1% in fiscal Q3 to 9.4% in fiscal Q4. However, this is still nearly double the comp sales growth rate of 5.1% in the same quarter in 2019.
Analysts currently expect Costco to report full-year sales growth of 8.4% in fiscal 2022 and 7.4% in fiscal 2023. Earnings per share are expected to grow at a compound annual rate of 9.7% over the next five years. These estimates are consistent with Costco's performance over the last decade.
Still, the upward trend over the last few months in adjusted comp sales growth shows that Costco could maintain growth above pre-pandemic levels longer than analysts expect. If consumer prices escalate further, Costco would be under as much economic pressure as any other retailer. As long as inflation doesn't get completely out of control, Costco appears to be in a great position to widen its competitive moat and gain market share in the near term.
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John Ballard has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For example, Costco is stocking toys earlier for the holidays as part of an effort to keep its warehouses full, and it has already chartered three ocean vessels to transport goods between Asia and North America for next year. The increase in the Consumer Price Index in recent months correlates with a small acceleration in Costco's comp sales from July through September, excluding gas and foreign currency. As long as inflation doesn't get completely out of control, Costco appears to be in a great position to widen its competitive moat and gain market share in the near term. | Costco's membership renewal rates are trending up despite supply issues impacting the retail industry, as consumers seek more value in this inflationary and unpredictable environment. The increase in the Consumer Price Index in recent months correlates with a small acceleration in Costco's comp sales from July through September, excluding gas and foreign currency. Still, the upward trend over the last few months in adjusted comp sales growth shows that Costco could maintain growth above pre-pandemic levels longer than analysts expect. | Costco is in a great position Investors shouldn't expect Costco to continue growing at double-digit levels permanently. Analysts currently expect Costco to report full-year sales growth of 8.4% in fiscal 2022 and 7.4% in fiscal 2023. 10 stocks we like better than Costco Wholesale When our award-winning analyst team has a stock tip, it can pay to listen. | Costco's membership renewal rates are trending up despite supply issues impacting the retail industry, as consumers seek more value in this inflationary and unpredictable environment. Costco reported that its membership renewal rate inched up to 91.3% in the U.S. and Canada for an increase of 0.3 percentage points over fiscal Q3. Costco Wholesale (NASDAQ: COST) capped off fiscal 2021 on a high note, with fourth-quarter revenue rising 17.4% year over year. | null |
14,011 | 626,178 | 2021-10-12 00:00:00 UTC | Costco Keeps Rolling With Strong September Sales | COST | https://www.nasdaq.com/articles/costco-keeps-rolling-with-strong-september-sales-2021-10-12 | null | null | Last month, Costco Wholesale (NASDAQ: COST) reported stellar results for the final quarter of its 2021 fiscal year. Indeed, fiscal 2021 was one of the most impressive years in Costco's impressive history. Adjusted comparable sales jumped 13.4% and earnings per share reached a record $11.27.
Costco has gotten off to a good start in fiscal 2022, as well. Last week, the leading warehouse club chain reported excellent sales results for the retail month of September.
Another strong month
During the five-week period ending on Oct. 3, Costco generated net sales of $19.5 billion: up 15.8% year over year. Comparable sales grew 14.3%. Excluding the impact of soaring gasoline prices and the weaker U.S. dollar, adjusted comparable sales increased 9.4% compared to September 2020.
A 9.4% comp sales gain would be impressive under any circumstances. Making it even more remarkable, Costco faced a tough comparison after posting a 16.9% comp sales increase in the prior-year period. Moreover, supply chain constraints have held back sales for many retailers in recent months. This highlights how the retail giant is capitalizing on its scale to keep an adequate volume of merchandise flowing to its warehouses and building upon the sizable market share gains it achieved during the peak of the pandemic.
Broad-based sales gains
Continuing recent trends, rising traffic drove most of Costco's sales growth last month, as consumers have become more comfortable shopping in stores this year. Comparable traffic rose 7.2%, including a 7.4% increase in the U.S. And while Costco reported solid growth around the world, its domestic business continued to lead the way with a 10% comp sales gain last month.
Image source: Costco Wholesale.
Additionally, Costco continued to post solid growth across all of its major merchandise categories in September. It recorded mid-high single-digit comp sales growth for food and sundries and fresh foods. Non-food merchandise performed even better, with low-double-digit comp sales growth, thanks to strong demand for home furnishings, jewelry, tires, and garden items.
Ancillary businesses like Costco's gas stations, food courts, pharmacies, and optical departments also continued to recover in September. Ancillary comp sales surged more than 40%.
Costco deepens its moat
Inflation has started to heat up this year, due to a combination of factors including a shortage of shipping capacity, pandemic-related production losses, and high demand. The uptick in inflation should help Costco continue reporting strong sales growth in the months ahead.
First, Costco has raised prices on certain items, which will boost revenue as long as consumers are willing to pay the increased prices. Second, Costco has immense bargaining power with its suppliers, due to its massive sales volumes and limited selection of items. That helps it keep costs down and limit price hikes compared to rivals, which in turn could help it gain even more market share in an inflationary environment.
If members continue to increase their spending at Costco, it should encourage more of them to upgrade to the pricier executive membership (which offers 2% cash back on most purchases). It will also ease the way for Costco to raise membership prices sometime in 2022.
Finally, rising sales will deepen Costco's moat. Net sales totaled $192.1 billion in fiscal 2021 and should easily surpass $200 billion in fiscal 2022, giving the company virtually unmatched buying power. That will further entrench Costco's price leadership, ensuring the loyalty and continued growth of its membership base.
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Adam Levine-Weinberg owns shares of Costco Wholesale. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Comparable traffic rose 7.2%, including a 7.4% increase in the U.S. And while Costco reported solid growth around the world, its domestic business continued to lead the way with a 10% comp sales gain last month. Costco deepens its moat Inflation has started to heat up this year, due to a combination of factors including a shortage of shipping capacity, pandemic-related production losses, and high demand. Last month, Costco Wholesale (NASDAQ: COST) reported stellar results for the final quarter of its 2021 fiscal year. | Last month, Costco Wholesale (NASDAQ: COST) reported stellar results for the final quarter of its 2021 fiscal year. Broad-based sales gains Continuing recent trends, rising traffic drove most of Costco's sales growth last month, as consumers have become more comfortable shopping in stores this year. Indeed, fiscal 2021 was one of the most impressive years in Costco's impressive history. | Broad-based sales gains Continuing recent trends, rising traffic drove most of Costco's sales growth last month, as consumers have become more comfortable shopping in stores this year. Comparable traffic rose 7.2%, including a 7.4% increase in the U.S. And while Costco reported solid growth around the world, its domestic business continued to lead the way with a 10% comp sales gain last month. The uptick in inflation should help Costco continue reporting strong sales growth in the months ahead. | Another strong month During the five-week period ending on Oct. 3, Costco generated net sales of $19.5 billion: up 15.8% year over year. Comparable traffic rose 7.2%, including a 7.4% increase in the U.S. And while Costco reported solid growth around the world, its domestic business continued to lead the way with a 10% comp sales gain last month. The uptick in inflation should help Costco continue reporting strong sales growth in the months ahead. | null |
14,012 | 626,179 | 2021-10-08 00:00:00 UTC | These 3 Growth Stocks Did Terribly in September, but Now Is the Time to Buy | COST | https://www.nasdaq.com/articles/these-3-growth-stocks-did-terribly-in-september-but-now-is-the-time-to-buy-2021-10-08 | null | null | September wasn't a very good time for the stock market in general, as the S&P 500 lost almost 5% for the month. After a rip-snorting 20% run-up from January to August, stocks took a breather as autumn settled in.
Inflation, supply chain disruptions, and unease about the economy seemed to unsettle investors who took some of the profits they made through the year off the table.
But time in the market is more important than timing the market, meaning you should always be adding money regardless of market conditions. You never know when a bear market will suddenly turn into a bull.
The three growth stocks below had a horrible September, actually managing to perform worse than the broader market index. However, since their businesses aren't broken, this looks like a great time to buy their discounted shares.
Image source: Getty Images.
Altria (September returns: down 9.4%)
Tobacco stock Altria (NYSE: MO) tumbled almost 10% in September because it suffered a pair of bad news events: The Food & Drug Administration didn't approve the Juul electronic cigarette for sale (it didn't deny it either) and the U.S. International Trade Commission ruled Philip Morris International's (NYSE: PM) IQOS heated tobacco device violated the patents of rival British American Tobacco (NYSE: BTI). Therefore, the offending products can't be imported to America right now.
Because traditional cigarettes are in a secular decline and reduced-risk vapor products like Juul and IQOS are the future of smoking, at least for the near term, these two developments undermined Altria's growth trajectory.
The two events are certainly troubling, but they're not a death sentence for the tobacco giant. Traditional cigarette sales still comprise the vast bulk of Altria's revenue, and because of the addictive nature of nicotine, Altria's able to regularly raise prices several times a year and almost all of its customers will keep coming back for more. It has many years of profitable growth ahead of it still.
Moreover, the FDA could still approve the Juul e-cig for sales. While concerns over teen vaping have clouded the discussion surrounding Juul, even now it remains the most popular e-cig on the market and still owns more than half the market. And Philip Morris is preparing to appeal the ITC's ruling, so that's not a done deal either.
With a dividend that's currently yielding 7.8% annually and a stock that trades under 10 times next year's earnings, Altria is a bargain at these prices.
Image source: Getty Images.
Kroger (September returns: down 12.2%)
The largest pure-play supermarket chain, Kroger (NYSE: KR), had a disappointing September despite releasing its second-quarter earnings report during the month that beat analyst expectations and raising its full-year guidance.
What spooked the market was Kroger's gross profit margin slipping 140 basis points because of inflation's impact on prices, merchandise, and labor, coupled with the constraints imposed by supply chain disruptions.
The lingering impact of the pandemic, plus the flare-up of new COVID-19 cases due to variants, is causing consumers to stock up again on certain products. Costco Wholesale and Walmart's Sam's Club, for example, are again beginning to limit customer purchases of toilet paper and some other high-value goods. We might not get to the sort of panic buying that marked the start of the pandemic, but increased customer purchase volume is a near-term tailwind for the supermarket chain.
Longer-term, Kroger's growth trajectory remains unchallenged, and while profits could get pinched due to these temporary logjams hindering the free flow of goods, they will sort themselves out over time.
Kroger also trades at a discounted price to projected earnings and goes for a fraction of its sales. Although the stock is up 25% year to date, the big pullback in its shares in September suggests it's time to stock up.
Image source: Target.
Target (September returns: down 7.4%)
Like Kroger, Target (NYSE: TGT) is a retailer feeling the effects of the bottlenecks at shipping ports on the West Coast and around the globe, but business is still booming. Comparable sales soared 9% last quarter on top of a 25% gain a year ago, and it was all driven by customer traffic. Online sales were up 10% on top of a year-ago base that itself had nearly tripled in 12 months.
Analysts see Target growing annual sales 26% over the next five years to over $116 billion while profits are expected to soar 76% in that time.
Target is also addressing the worldwide shipping issue by chartering its own cargo ship to ensure it can get consumers the merchandise they're looking for, joining other retailers like Walmart and Home Depot in taking a proactive approach to the crisis. It's also ensuring it gets its share of the holiday spending that is predicted to be quite elevated this year by launching Christmas sales this month.
With Target having just become a Dividend King by raising its payout for the 50th consecutive year, the pullback in its shares seems like an opportune time to stake a claim in this discounted growth stock.
10 stocks we like better than Target
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Rich Duprey owns shares of Altria Group. The Motley Fool owns shares of and recommends Costco Wholesale and Home Depot. The Motley Fool recommends British American Tobacco. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Costco Wholesale and Walmart's Sam's Club, for example, are again beginning to limit customer purchases of toilet paper and some other high-value goods. The Motley Fool owns shares of and recommends Costco Wholesale and Home Depot. Because traditional cigarettes are in a secular decline and reduced-risk vapor products like Juul and IQOS are the future of smoking, at least for the near term, these two developments undermined Altria's growth trajectory. | The Motley Fool owns shares of and recommends Costco Wholesale and Home Depot. Costco Wholesale and Walmart's Sam's Club, for example, are again beginning to limit customer purchases of toilet paper and some other high-value goods. Altria (September returns: down 9.4%) Tobacco stock Altria (NYSE: MO) tumbled almost 10% in September because it suffered a pair of bad news events: The Food & Drug Administration didn't approve the Juul electronic cigarette for sale (it didn't deny it either) and the U.S. International Trade Commission ruled Philip Morris International's (NYSE: PM) IQOS heated tobacco device violated the patents of rival British American Tobacco (NYSE: BTI). | Costco Wholesale and Walmart's Sam's Club, for example, are again beginning to limit customer purchases of toilet paper and some other high-value goods. The Motley Fool owns shares of and recommends Costco Wholesale and Home Depot. Altria (September returns: down 9.4%) Tobacco stock Altria (NYSE: MO) tumbled almost 10% in September because it suffered a pair of bad news events: The Food & Drug Administration didn't approve the Juul electronic cigarette for sale (it didn't deny it either) and the U.S. International Trade Commission ruled Philip Morris International's (NYSE: PM) IQOS heated tobacco device violated the patents of rival British American Tobacco (NYSE: BTI). | Costco Wholesale and Walmart's Sam's Club, for example, are again beginning to limit customer purchases of toilet paper and some other high-value goods. The Motley Fool owns shares of and recommends Costco Wholesale and Home Depot. September wasn't a very good time for the stock market in general, as the S&P 500 lost almost 5% for the month. | null |
14,013 | 626,180 | 2021-10-07 00:00:00 UTC | Interesting COST Put And Call Options For November 26th | COST | https://www.nasdaq.com/articles/interesting-cost-put-and-call-options-for-november-26th-2021-10-07 | null | null | Investors in Costco Wholesale Corp (Symbol: COST) saw new options become available today, for the November 26th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the COST options chain for the new November 26th contracts and identified one put and one call contract of particular interest.
The put contract at the $450.00 strike price has a current bid of $8.85. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $450.00, but will also collect the premium, putting the cost basis of the shares at $441.15 (before broker commissions). To an investor already interested in purchasing shares of COST, that could represent an attractive alternative to paying $458.56/share today.
Because the $450.00 strike represents an approximate 2% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 1.97% return on the cash commitment, or 14.34% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Costco Wholesale Corp, and highlighting in green where the $450.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $465.00 strike price has a current bid of $8.60. If an investor was to purchase shares of COST stock at the current price level of $458.56/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $465.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 3.28% if the stock gets called away at the November 26th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if COST shares really soar, which is why looking at the trailing twelve month trading history for Costco Wholesale Corp, as well as studying the business fundamentals becomes important. Below is a chart showing COST's trailing twelve month trading history, with the $465.00 strike highlighted in red:
Considering the fact that the $465.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 1.88% boost of extra return to the investor, or 13.68% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $458.56) to be 18%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Of course, a lot of upside could potentially be left on the table if COST shares really soar, which is why looking at the trailing twelve month trading history for Costco Wholesale Corp, as well as studying the business fundamentals becomes important. Below is a chart showing COST's trailing twelve month trading history, with the $465.00 strike highlighted in red: Considering the fact that the $465.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Costco Wholesale Corp (Symbol: COST) saw new options become available today, for the November 26th expiration. | Below is a chart showing the trailing twelve month trading history for Costco Wholesale Corp, and highlighting in green where the $450.00 strike is located relative to that history: Turning to the calls side of the option chain, the call contract at the $465.00 strike price has a current bid of $8.60. Below is a chart showing COST's trailing twelve month trading history, with the $465.00 strike highlighted in red: Considering the fact that the $465.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Costco Wholesale Corp (Symbol: COST) saw new options become available today, for the November 26th expiration. | Below is a chart showing the trailing twelve month trading history for Costco Wholesale Corp, and highlighting in green where the $450.00 strike is located relative to that history: Turning to the calls side of the option chain, the call contract at the $465.00 strike price has a current bid of $8.60. Below is a chart showing COST's trailing twelve month trading history, with the $465.00 strike highlighted in red: Considering the fact that the $465.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Costco Wholesale Corp (Symbol: COST) saw new options become available today, for the November 26th expiration. | At Stock Options Channel, our YieldBoost formula has looked up and down the COST options chain for the new November 26th contracts and identified one put and one call contract of particular interest. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $450.00, but will also collect the premium, putting the cost basis of the shares at $441.15 (before broker commissions). Below is a chart showing COST's trailing twelve month trading history, with the $465.00 strike highlighted in red: Considering the fact that the $465.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. | null |
14,014 | 626,183 | 2021-10-06 00:00:00 UTC | 3 Consumer Staples Stocks To Watch Amid Supply Chain Worries | COST | https://www.nasdaq.com/articles/3-consumer-staples-stocks-to-watch-amid-supply-chain-worries-2021-10-06 | null | null | Are These The Best Consumer Staples Stocks To Buy This Week?
If you have been keeping up with the latest stock market news, chances are you see the phrase “supply chain” a whole lot. With this among other factors hanging over the stock market now, investors could be turning to consumer staples stocks. Why? Well, in essence, even with this problem factored in, demand for these companies’ wares would persist. As the name suggests, consumer staples provide the general public with their basic necessities. This can range from the food & beverage industry to retailers like Walmart (NYSE: WMT) and Costco (NASDAQ: COST).
For the most part, consumer staples are considered among the more defensive plays in the stock market today. While they do not provide the fastest equity gains, some do offer consistent dividends. Given the recent volatility in stocks this week, this could be another incentive for investors now. Evidently, consumer staples appear to be aware of this as well. Late last month, Starbucks (NASDAQ: SBUX) raised its quarterly dividend payout by a whopping 8%. Not to mention, Starbucks alongside McDonald’s (NYSE: MCD) reported stellar quarters recently. Notably, both companies saw year-over-year gains of over 250% in both their respective net income and earnings per share metrics.
On top of all that, some of the biggest names in the consumer staples market continue to optimize their operations now. Namely, Coca-Cola (NYSE: KO) is now turning to “bulk carriers”, a type of cargo ship, to transport more of its supplies globally. This would show that even industry giants in this space are eager to grow with the times. After considering all of this, could one of these top consumer staples stocks be a buy right now?
Top Consumer Staples Stocks To Buy [Or Sell] In October 2021
PepsiCo Inc. (NASDAQ: PEP)
Target Corporation (NYSE: TGT)
Kroger Company (NYSE: KR)
PepsiCo
For starters, we have PepsiCo. By and large, most would be familiar with the global food company’s offerings. This ranges from its famous beverage lines such as Pepsi-Cola and Gatorade to food brands like Frito-Lay and Quaker. By PepsiCo’s estimates, its products are consumed over a billion times a day across more than 200 countries worldwide. Given the market reach of PepsiCo, PEP stock could be a go-to for investors eyeing consumer staples stocks now.
To highlight, this could be the case on account of its recent fiscal quarter earnings report posted yesterday. To begin with, PepsiCo reported an earnings per share of $1.79 on revenue of $20.19 billion. This would exceed Wall Streets’ expectations of $1.73 and $19.39 billion respectively. Furthermore, the company also raised its full-year outlook for revenue and earnings per share growth. All of this would serve to highlight PepsiCo’s resilience despite less-than-ideal operating conditions.
All in all, CEO Ramon Laguarta had this to say, “We are extremely pleased with the progress we are making on our strategic agenda, and remain committed to the investments in our people, supply chain, plants, go-to-market systems, and digitization initiatives to build competitive advantages and win in the marketplace.” With PepsiCo’s current confidence in its growth prospects this year, could PEP stock be a top pick in the stock market now?
Source: TD Ameritrade TOS
[Read More] Best Lithium Battery Stocks To Buy Now? 4 To Know
Target
Following that, we have Target Corporation. As one of the largest retailers in the U.S., Target would be another notable player in the consumer staples market. Via a network of over 1,900 stores and its proprietary e-commerce portal, Target caters to the needs of consumers nationwide. Like many of its competitors, the company offers a wide range of wares today. This includes but is not limited to groceries, electronics, apparel, and even home furnishings. As such, it could be a prime target for consumers and investors alike as the year-end holiday season approaches.
Not to mention, TGT stock is currently holding on to gains of over 140% since its pandemic era low. Given its role in providing household essentials to consumers throughout the pandemic, this is not surprising. Accordingly, maintaining this momentum in the current quarter appears to be a top priority for Target now. Yesterday, news broke of the company’s plans to raise its hourly wages during peak days this holiday season.
According to Target, this applies to Saturdays and Sundays from November 20 to December 19. In detail, Target store and service center employees working during said days will receive an extra $2 per hour. Meanwhile, employees in the supply chain division will receive the bonus pay for peak periods between October 10 and December 18. In theory, this serves to not only lighten Target’s workforce concerns but also help it gear up for a busy season ahead. As the company kicks into high gear now, will you be keeping an eye on TGT stock?
Source: TD Ameritrade TOS
[Read More] 3 Top Pot Stocks To Watch After The SAFE Banking Act Update
Kroger
Last but not least, we will be taking a look at the Kroger Company. In brief, Kroger is an Ohio-based retail company. By Kroger’s estimates, it is the largest supermarket in the U.S. by revenue and the second-largest general retailer. Similar to our previous entry, KR stock could also be worth watching right now. With year-to-date gains of 24%, could the company’s shares still have room to grow?
Well, for one thing, Kroger is not sitting idly by on the operational front now. This is evident given the latest news regarding its ongoing partnership with Beyond Meat (NASDAQ: BYND) and the Real Good Foods Company. As of this week, the Beyond Meat Pizza is now available to consumers via Kroger stores nationwide. According to Beyond Meat, the high-protein frozen pizza is made with its plant-based sausage. Seeing as Kroger is the exclusive retailer of this product, it would serve to expand its current offerings. Moreover, as consumer markets seek healthier or more environmentally sustainable meals, this could benefit Kroger.
If all that wasn’t enough, the company also recently declared a quarterly dividend of $0.21 per share. According to Kroger, its dividends have grown at a double-digit compound annual growth rate since 2006. Overall, Kroger seems to be firing on all cylinders now. With that said, will you add KR stock to your portfolio anytime soon?
Source: TD Ameritrade TOS
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | This can range from the food & beverage industry to retailers like Walmart (NYSE: WMT) and Costco (NASDAQ: COST). Namely, Coca-Cola (NYSE: KO) is now turning to “bulk carriers”, a type of cargo ship, to transport more of its supplies globally. All in all, CEO Ramon Laguarta had this to say, “We are extremely pleased with the progress we are making on our strategic agenda, and remain committed to the investments in our people, supply chain, plants, go-to-market systems, and digitization initiatives to build competitive advantages and win in the marketplace.” With PepsiCo’s current confidence in its growth prospects this year, could PEP stock be a top pick in the stock market now? | This can range from the food & beverage industry to retailers like Walmart (NYSE: WMT) and Costco (NASDAQ: COST). Top Consumer Staples Stocks To Buy [Or Sell] In October 2021 PepsiCo Inc. (NASDAQ: PEP) Target Corporation (NYSE: TGT) Kroger Company (NYSE: KR) PepsiCo For starters, we have PepsiCo. Given the market reach of PepsiCo, PEP stock could be a go-to for investors eyeing consumer staples stocks now. | This can range from the food & beverage industry to retailers like Walmart (NYSE: WMT) and Costco (NASDAQ: COST). With this among other factors hanging over the stock market now, investors could be turning to consumer staples stocks. Top Consumer Staples Stocks To Buy [Or Sell] In October 2021 PepsiCo Inc. (NASDAQ: PEP) Target Corporation (NYSE: TGT) Kroger Company (NYSE: KR) PepsiCo For starters, we have PepsiCo. | This can range from the food & beverage industry to retailers like Walmart (NYSE: WMT) and Costco (NASDAQ: COST). With this among other factors hanging over the stock market now, investors could be turning to consumer staples stocks. Top Consumer Staples Stocks To Buy [Or Sell] In October 2021 PepsiCo Inc. (NASDAQ: PEP) Target Corporation (NYSE: TGT) Kroger Company (NYSE: KR) PepsiCo For starters, we have PepsiCo. | null |
14,015 | 626,184 | 2021-10-03 00:00:00 UTC | Best Dividend Stocks To Buy In October 2021? 3 To Watch | COST | https://www.nasdaq.com/articles/best-dividend-stocks-to-buy-in-october-2021-3-to-watch-2021-10-03 | null | null | 3 Top Dividend Stocks For Your Watchlist This Week
As the broader stock market continues to extend its volatile streak, dividend stocks continue to gain traction among investors. If anything, this would be due to a wide variety of factors weighing in on the market now. These range from the less-than-ideal economic backdrop to active debates about the debt ceiling. Accordingly, this could see investors looking for more consistent returns in the form of dividends. For the uninitiated, dividends are essentially payouts from companies towards shareholders. With the promise of either quarterly or monthly returns on top of potential equity gains, I can see the current appeal.
Moreover, some of the best dividend stocks now belong to companies whose services are constantly in demand. This would include consumer staples, infrastructure, materials, and health care firms. With the uncertainty around the current state of the economy, this could also incentivize investors now. For instance, we could take a look at the likes of 3M (NYSE: MMM). The company announced its latest dividend payment of $1.48 per share back in August. Notably, 3M has been paying dividends consecutively for over 100 years now by the company’s estimates.
Elsewhere, companies like ExxonMobil (NYSE: XOM) are hard at work refining their operations as well. As of this week, the company is now working with Rosneft, a leading Russian petroleum refinery firm. The duo are developing lower-carbon technologies to reduce greenhouse gas emissions from their overall operations. Additionally, they are also considering projects focused on alternative fuels such as hydrogen and ammonia. This would indicate that even dividend giants are looking to grow with the times. Overall, the dividend stock trade is well and active now. Could that make one of these three dividend stocks top picks in the stock market this week?
Top Dividend Stocks To Watch In The Stock Market Now
Costco Wholesale Corporation (NASDAQ: COST)
Leggett & Platt Inc. (NYSE: LEG)
Albemarle Corporation (NYSE: ALB)
Costco Wholesale
To begin with, we will be taking a look at the Costco Wholesale Corporation. In brief, Costco is a big-box retail store. It is one of the largest retailers in the world today. For the most part, Costco offers consumers a vast array of wares ranging from daily necessities to household supplies and consumables. All of this is only available to Costco members who pay a yearly membership fee. However, one of the key differences between the company and other retailers is the volume of items customers can purchase.
Thanks to its big-box offerings, many have and continue to turn to Costco when looking to stock up on supplies. From the ongoing pandemic to hurricane season, the company’s services would be relevant in the current market. Likewise, this could see COST stock gaining attention amongst investors now. With sizable year-to-date gains of over 18%, could it be worth investing in?
Well, for one thing, Costco appears to be performing on the financial front. In its latest fiscal quarter report, the company saw a total revenue increase of 17% year-over-year. Given that this is in comparison to a quarter where consumers were stocking up heavily, this is admirable. All of this adds up to a whopping $195.93 billion in revenue for the quarter. On top of that, Costco also posted gains of over 24% in both its net income and earnings per share. After considering all of this, would COST stock be a top buy for you?
Source: TD Ameritrade TOS
[Read More] Best Lithium Battery Stocks To Buy Now? 4 To Know
Leggett & Platt
Another name to know among dividend stocks now would be Leggett & Platt (LEG). In essence, it is a diversified manufacturer that designs a wide variety of engineered components. This ranges from seating components in automobiles to carpet cushions and hard-surface flooring for houses alongside textiles. Given the importance of LEG’s wares across numerous industries, LEG stock could be worth watching now.
By and large, the company’s shares have almost doubled in value since its pandemic era low. Adding to that, LEG reported stellar figures in its latest fiscal quarter report back in August. In it, the company posted a record quarterly revenue of $1.27 billion, marking a solid 50% year-over-year increase. Furthermore, LEG also reported massive surges of 1,939% in net income and 1,740% in earnings per share. Even amidst the current pandemic conditions, LEG continues to show its resilience. All in all, CEO Karl Glassman cited strong consumer demand for LEG’s wares and the company’s continued drive as key growth factors for the quarter.
At the same time, the company also increased its quarterly dividend by 5% quarter-over-quarter. This adds up to an annual dividend yield of 3.5%, marking LEG’s 50th consecutive year of annual dividend increases. As a result of this solid quarter, the company also raised its full-year 2021 guidance for sales and earnings per share. Given LEG’s current momentum, could LEG stock be worth investing in for you?
Source: TD Ameritrade TOS
[Read More] 3 Top Pot Stocks To Watch After The SAFE Banking Act Update
Albemarle
Next up, we have the Albemarle Corporation. It is a North Carolina-based chemical manufacturing company. The company primarily operates via three divisions, lithium, bromine specialties, and catalysts. By the company’s estimates, it is one of the largest providers of lithium for electric vehicle (EV) batteries in the world now. Given the overall shift in focus towards clean energy vehicles globally, investors could be keeping an eye on ALB stock now.
If anything, the company’s shares are now looking at gains of over 150% in the past year. Even so, Albemarle does not appear to be slowing down anytime soon. Through one of its U.K. subsidiaries, the company is looking to acquire Guangxi Tianyuan New Energy Materials (Tianyuan). For some perspective, the Chinese firm mainly acts as a lithium converter. With this acquisition, Albemarle will be getting access to Tianyuan’s lithium processing plant. The likes of which boasts an annual conversion capacity of up to 25,000 metric tons of battery-grade lithium. With the plant set to begin commercial production by the first half of 2022, Albemarle could be looking at busy days ahead.
In closing, CEO Kent Masters said, “The acquisition of Tianyuan, which owns and operates a newly constructed lithium processing plant, aligns with our strategy to pursue profitable growth in line with customer demand.” Alongside the global growth of the EV market, Albemarle seems to be aggressively expanding its international operations. All things considered, will you be adding ALB stock to your portfolio anytime soon?
Source: TD Ameritrade TOS
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Top Dividend Stocks To Watch In The Stock Market Now Costco Wholesale Corporation (NASDAQ: COST) Leggett & Platt Inc. (NYSE: LEG) Albemarle Corporation (NYSE: ALB) Costco Wholesale To begin with, we will be taking a look at the Costco Wholesale Corporation. In brief, Costco is a big-box retail store. For the most part, Costco offers consumers a vast array of wares ranging from daily necessities to household supplies and consumables. | Top Dividend Stocks To Watch In The Stock Market Now Costco Wholesale Corporation (NASDAQ: COST) Leggett & Platt Inc. (NYSE: LEG) Albemarle Corporation (NYSE: ALB) Costco Wholesale To begin with, we will be taking a look at the Costco Wholesale Corporation. In brief, Costco is a big-box retail store. For the most part, Costco offers consumers a vast array of wares ranging from daily necessities to household supplies and consumables. | Top Dividend Stocks To Watch In The Stock Market Now Costco Wholesale Corporation (NASDAQ: COST) Leggett & Platt Inc. (NYSE: LEG) Albemarle Corporation (NYSE: ALB) Costco Wholesale To begin with, we will be taking a look at the Costco Wholesale Corporation. In brief, Costco is a big-box retail store. For the most part, Costco offers consumers a vast array of wares ranging from daily necessities to household supplies and consumables. | Top Dividend Stocks To Watch In The Stock Market Now Costco Wholesale Corporation (NASDAQ: COST) Leggett & Platt Inc. (NYSE: LEG) Albemarle Corporation (NYSE: ALB) Costco Wholesale To begin with, we will be taking a look at the Costco Wholesale Corporation. In brief, Costco is a big-box retail store. For the most part, Costco offers consumers a vast array of wares ranging from daily necessities to household supplies and consumables. | null |
14,016 | 626,185 | 2021-10-01 00:00:00 UTC | 3 Dividend Stocks to Buy That Could Build Incredible Wealth | COST | https://www.nasdaq.com/articles/3-dividend-stocks-to-buy-that-could-build-incredible-wealth-2021-10-01 | null | null | When measuring returns, just looking at a stock's price doesn't tell investors everything they need to know. Total returns that include dividends show the real story. And that can make an enormous difference.
Of course, simply reaching for high dividend yields isn't the right approach. Great long-term investments only come from businesses with solid long-term prospects. The good news is you don't have to get fancy when searching for hidden big winners.
Image source: Getty Images.
The following three companies are well known to retail investors, and they have outperformed the S&P 500 index over the last 20 years in share price returns alone. But factoring in dividends paid shows the dramatic difference in returns. Home Depot (NYSE: HD) has more than doubled the broader index's returns while Costco (NASDAQ: COST) has more than tripled it. Outdoor recreation GPS device maker Garmin (NASDAQ: GRMN) has beaten the index by a factor of six.
Total Return Level data by YCharts.
For investors who have held any of these three stocks for an extended period of time, they likely contributed to building life-changing wealth. And the future looks bright for each of these three companies.
1. Home Depot: Strategies paying off
Home Depot rode strong tailwinds during the pandemic by remaining open as an essential business and supporting a surge in home project work. But that success was based on a strategy and technology that began well before the pandemic.
The company initiated One Home Depot in 2017, a multi-year strategy for an $11 billion investment to build the company's online channels and merge the digital and physical shopping experience for customers. It also acquired HD Supply, a supplier of maintenance, repair, and operations products, in an $8 billion deal announced in late 2020 to enhance its professional contractor base. Those two business strategies have paid off and should continue to do so going forward.
The results speak for themselves. Sales for Home Depot's fiscal 2020 period ended Jan. 31, 2021, grew 20% over fiscal 2019. That business strength continued into fiscal 2021 with net revenue growing almost 19% for the six months ended Aug. 1, 2021. Management is sharing that success with shareholders. Home Depot announced the authorization of a new $20 billion share repurchase program in May 2021. It also increased its quarterly dividend by 10% this year, continuing a string of annual increases that began in 2009.
2. Costco: A different approach to dividends
Popular warehouse retailer Costco increased its dividend by 13% this year. That came after a similarly successful fiscal year with the company prospering throughout the pandemic. For its fiscal year 2021 ended Aug. 29, 2021, Costco's net sales jumped almost 18%. And that came on top of a more than 9% jump the previous fiscal year. Net income for fiscal 2021 soared 25% over the prior year.
As business was thriving, Costco rewarded investors with a $10 per share special dividend in November 2020. That represented the fourth supplemental dividend payout from the company in the last eight years. Shareholders received those payments in addition to a base dividend that was increased by 13% this year as well.
Costco has a history of sharing excess cash with shareholders when times are good. And the company has a loyal customer base that should ensure success will continue. Its 110 million membership cardholders have a 91% renewal rate in the U.S. and Canada.
Image source: Getty Images.
3. Garmin: Under-the-radar winner
GPS-enabled device maker Garmin has come a long way since it was mostly known for its automotive navigation devices. It now receives almost 90% of its revenue from its fitness, outdoor, aviation, and marine segments. And sales of those offerings are currently growing at well into double-digit rates.
Overall revenue grew 11% in 2020 versus 2019. But management is predicting 2021 year-over-year sales will grow between 10% and 27% in each of its segments, led by marine, fitness, and outdoor.
Garmin also shares its considerable cash flow with shareholders. It has increased its dividend by almost 70% in the past 10 years, at the same time it has continued to invest in, and grow, the business. Investors have experienced share price gains of more than 580% in that time. Management has also built up a balance sheet with no debt and $3.2 billion of cash and marketable securities as of June 26, 2021.
It may be surprising to see that Garmin stock has performed the best among this trio over the past two decades. With momentum in the business growing due to the popularity of outdoor recreation including boating, camping, running, and biking, the underlying business success should continue. And with its solid balance sheet and history of rising dividends, past performance might still be an indicator of future results for investors in Garmin.
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Howard Smith owns shares of Garmin and Home Depot. The Motley Fool owns shares of and recommends Costco Wholesale and Home Depot. The Motley Fool recommends Garmin. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Home Depot (NYSE: HD) has more than doubled the broader index's returns while Costco (NASDAQ: COST) has more than tripled it. Costco: A different approach to dividends Popular warehouse retailer Costco increased its dividend by 13% this year. For its fiscal year 2021 ended Aug. 29, 2021, Costco's net sales jumped almost 18%. | Costco: A different approach to dividends Popular warehouse retailer Costco increased its dividend by 13% this year. For its fiscal year 2021 ended Aug. 29, 2021, Costco's net sales jumped almost 18%. Home Depot (NYSE: HD) has more than doubled the broader index's returns while Costco (NASDAQ: COST) has more than tripled it. | Home Depot (NYSE: HD) has more than doubled the broader index's returns while Costco (NASDAQ: COST) has more than tripled it. Costco: A different approach to dividends Popular warehouse retailer Costco increased its dividend by 13% this year. For its fiscal year 2021 ended Aug. 29, 2021, Costco's net sales jumped almost 18%. | Costco has a history of sharing excess cash with shareholders when times are good. Home Depot (NYSE: HD) has more than doubled the broader index's returns while Costco (NASDAQ: COST) has more than tripled it. Costco: A different approach to dividends Popular warehouse retailer Costco increased its dividend by 13% this year. | null |
14,017 | 626,186 | 2021-09-30 00:00:00 UTC | SSO, NFLX, COST, T: ETF Outflow Alert | COST | https://www.nasdaq.com/articles/sso-nflx-cost-t%3A-etf-outflow-alert-2021-09-30 | null | null | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the ProShares Ultra S&P500 (Symbol: SSO) where we have detected an approximate $288.7 million dollar outflow -- that's a 6.2% decrease week over week (from 37,700,000 to 35,350,000). Among the largest underlying components of SSO, in trading today Netflix Inc (Symbol: NFLX) is up about 2.5%, Costco Wholesale Corp (Symbol: COST) is up about 0.5%, and AT&T Inc (Symbol: T) is lower by about 0.5%. For a complete list of holdings, visit the SSO Holdings page » The chart below shows the one year price performance of SSO, versus its 200 day moving average:
Looking at the chart above, SSO's low point in its 52 week range is $67.85 per share, with $133.67 as the 52 week high point — that compares with a last trade of $123.27. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs experienced notable outflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of SSO, in trading today Netflix Inc (Symbol: NFLX) is up about 2.5%, Costco Wholesale Corp (Symbol: COST) is up about 0.5%, and AT&T Inc (Symbol: T) is lower by about 0.5%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the ProShares Ultra S&P500 (Symbol: SSO) where we have detected an approximate $288.7 million dollar outflow -- that's a 6.2% decrease week over week (from 37,700,000 to 35,350,000). These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | Among the largest underlying components of SSO, in trading today Netflix Inc (Symbol: NFLX) is up about 2.5%, Costco Wholesale Corp (Symbol: COST) is up about 0.5%, and AT&T Inc (Symbol: T) is lower by about 0.5%. For a complete list of holdings, visit the SSO Holdings page » The chart below shows the one year price performance of SSO, versus its 200 day moving average: Looking at the chart above, SSO's low point in its 52 week range is $67.85 per share, with $133.67 as the 52 week high point — that compares with a last trade of $123.27. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). | Among the largest underlying components of SSO, in trading today Netflix Inc (Symbol: NFLX) is up about 2.5%, Costco Wholesale Corp (Symbol: COST) is up about 0.5%, and AT&T Inc (Symbol: T) is lower by about 0.5%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the ProShares Ultra S&P500 (Symbol: SSO) where we have detected an approximate $288.7 million dollar outflow -- that's a 6.2% decrease week over week (from 37,700,000 to 35,350,000). For a complete list of holdings, visit the SSO Holdings page » The chart below shows the one year price performance of SSO, versus its 200 day moving average: Looking at the chart above, SSO's low point in its 52 week range is $67.85 per share, with $133.67 as the 52 week high point — that compares with a last trade of $123.27. | Among the largest underlying components of SSO, in trading today Netflix Inc (Symbol: NFLX) is up about 2.5%, Costco Wholesale Corp (Symbol: COST) is up about 0.5%, and AT&T Inc (Symbol: T) is lower by about 0.5%. For a complete list of holdings, visit the SSO Holdings page » The chart below shows the one year price performance of SSO, versus its 200 day moving average: Looking at the chart above, SSO's low point in its 52 week range is $67.85 per share, with $133.67 as the 52 week high point — that compares with a last trade of $123.27. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). | null |
14,018 | 626,188 | 2021-09-29 00:00:00 UTC | Notable Wednesday Option Activity: SIX, CVM, COST | COST | https://www.nasdaq.com/articles/notable-wednesday-option-activity%3A-six-cvm-cost-2021-09-29 | null | null | Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Six Flags Entertainment Corp (Symbol: SIX), where a total of 12,755 contracts have traded so far, representing approximately 1.3 million underlying shares. That amounts to about 103.2% of SIX's average daily trading volume over the past month of 1.2 million shares. Especially high volume was seen for the $40 strike put option expiring November 19, 2021, with 5,568 contracts trading so far today, representing approximately 556,800 underlying shares of SIX. Below is a chart showing SIX's trailing twelve month trading history, with the $40 strike highlighted in orange:
CEL-SCI Corporation (Symbol: CVM) options are showing a volume of 8,022 contracts thus far today. That number of contracts represents approximately 802,200 underlying shares, working out to a sizeable 102.9% of CVM's average daily trading volume over the past month, of 779,720 shares. Especially high volume was seen for the $5 strike put option expiring January 21, 2022, with 4,780 contracts trading so far today, representing approximately 478,000 underlying shares of CVM. Below is a chart showing CVM's trailing twelve month trading history, with the $5 strike highlighted in orange:
And Costco Wholesale Corp (Symbol: COST) saw options trading volume of 18,941 contracts, representing approximately 1.9 million underlying shares or approximately 101.7% of COST's average daily trading volume over the past month, of 1.9 million shares. Especially high volume was seen for the $460 strike call option expiring October 01, 2021, with 1,105 contracts trading so far today, representing approximately 110,500 underlying shares of COST. Below is a chart showing COST's trailing twelve month trading history, with the $460 strike highlighted in orange:
For the various different available expirations for SIX options, CVM options, or COST options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Especially high volume was seen for the $460 strike call option expiring October 01, 2021, with 1,105 contracts trading so far today, representing approximately 110,500 underlying shares of COST. Below is a chart showing CVM's trailing twelve month trading history, with the $5 strike highlighted in orange: And Costco Wholesale Corp (Symbol: COST) saw options trading volume of 18,941 contracts, representing approximately 1.9 million underlying shares or approximately 101.7% of COST's average daily trading volume over the past month, of 1.9 million shares. Below is a chart showing COST's trailing twelve month trading history, with the $460 strike highlighted in orange: For the various different available expirations for SIX options, CVM options, or COST options, visit StockOptionsChannel.com. | Below is a chart showing CVM's trailing twelve month trading history, with the $5 strike highlighted in orange: And Costco Wholesale Corp (Symbol: COST) saw options trading volume of 18,941 contracts, representing approximately 1.9 million underlying shares or approximately 101.7% of COST's average daily trading volume over the past month, of 1.9 million shares. Below is a chart showing COST's trailing twelve month trading history, with the $460 strike highlighted in orange: For the various different available expirations for SIX options, CVM options, or COST options, visit StockOptionsChannel.com. Especially high volume was seen for the $460 strike call option expiring October 01, 2021, with 1,105 contracts trading so far today, representing approximately 110,500 underlying shares of COST. | Below is a chart showing CVM's trailing twelve month trading history, with the $5 strike highlighted in orange: And Costco Wholesale Corp (Symbol: COST) saw options trading volume of 18,941 contracts, representing approximately 1.9 million underlying shares or approximately 101.7% of COST's average daily trading volume over the past month, of 1.9 million shares. Especially high volume was seen for the $460 strike call option expiring October 01, 2021, with 1,105 contracts trading so far today, representing approximately 110,500 underlying shares of COST. Below is a chart showing COST's trailing twelve month trading history, with the $460 strike highlighted in orange: For the various different available expirations for SIX options, CVM options, or COST options, visit StockOptionsChannel.com. | Below is a chart showing CVM's trailing twelve month trading history, with the $5 strike highlighted in orange: And Costco Wholesale Corp (Symbol: COST) saw options trading volume of 18,941 contracts, representing approximately 1.9 million underlying shares or approximately 101.7% of COST's average daily trading volume over the past month, of 1.9 million shares. Especially high volume was seen for the $460 strike call option expiring October 01, 2021, with 1,105 contracts trading so far today, representing approximately 110,500 underlying shares of COST. Below is a chart showing COST's trailing twelve month trading history, with the $460 strike highlighted in orange: For the various different available expirations for SIX options, CVM options, or COST options, visit StockOptionsChannel.com. | null |
14,019 | 626,191 | 2021-09-28 00:00:00 UTC | A Look Behind Costco's (NASDAQ:COST) High Valuation | COST | https://www.nasdaq.com/articles/a-look-behind-costcos-nasdaq%3Acost-high-valuation-2021-09-28 | null | null | By Stjepan Kalinic
This article first appeared on Simply Wall St News.
After a slump in the first quarter, Costco Wholesale (NASDAQ: COST) rallied to make new highs. While the company has many positives going on, with growing revenues and consumer loyalty, there are challenges on the horizon.
In this article, we will examine its profitability to check how it compares to the current valuation.
View our latest analysis for Costco Wholesale
Earnings Results
Non-GAAP EPS: US$3.90 (beat by US$0.36)
GAAP EPS: US$3.76 (beat by US$0.18)
Revenue: US$62.68b (beat by US$1.23b)
By the results, it looks like Costco is winning on all fronts. Besides the revenue rising 17% y/y, the company is also doing well on the e-commerce sales (11% up q/q) and comparable sales up 15%.
While the market notes the 41.5 price-to-earnings ratio, Wall Street is predominantly bullish on the stock. Morgan Stanley lifted its price target from US$500 to US$510, quoting the optimism on comparable sales in FY22.
Meanwhile, the CFO Richard Galanti pointed out the inflationary pressures, as the company's outlook tripled during this year – rising from 1%-1.5% to 3.5%-4.5%. The company sees the most notable inflation in plastics, paper goods, and fresh food.
Furthermore, to combat the logistics costs, the company is chartering ocean vessels. This doesn't come as a surprise as shipping costs are climbing to new highs.
Baltic Dry Index, September 28th; Source: StockCharts
A Look at the Profitability
Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
How To Calculate Return On Equity?
The formula for ROE is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Costco Wholesale is:
28% = US$5.1b ÷ US$18b (Based on the trailing twelve months to August 2021).
The 'return' refers to a company's earnings over the last year. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.28.
What Has ROE Got To Do With Earnings Growth?
By evaluating how much profit the company reinvests or "retains" for future growth, we will get an idea about the company's growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention have a higher growth rate than firms that don't share these attributes.
Costco Wholesale's Earnings Growth And 28% ROE
First thing first, we like that Costco Wholesale has an impressive ROE. Additionally, the company's ROE is higher than the industry average of 12%, which is remarkable. This probably laid the groundwork for Costco Wholesale's moderate 14% net income growth seen over the past five years.
Next, comparing with the industry net income growth, we found that Costco Wholesale's growth is relatively high compared to the industry average growth of 7.9% in the same period, which is great to see.
NasdaqGS: COST Past Earnings Growth September 28th, 2021
The basis for attaching value to a company is, to a great extent, tied to its earnings growth. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them show if the stock's future looks promising or ominous.
What is COST worth today? The intrinsic value infographic in our free research report helps visualize whether the market currently misprices COST.
Is Costco Wholesale Using Its Retained Earnings Effectively?
With a 3-year median payout ratio of 30% (implying that the company retains 70% of its profits), it seems that Costco Wholesale is reinvesting efficiently in a way that it sees a respectable amount of growth in its earnings and pays a dividend that's well covered.
Besides, Costco Wholesale has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 25%.
Accordingly, forecasts suggest that Costco Wholesale's future ROE will be 23%, which is similar to the current ROE.
Conclusion
Despite its rich valuation, we can conclude that Costco Wholesale is doing the right things. The company is taking precautionary measures to stay ahead of the ongoing problems like shipping and inflation while leading the way in other areas like they did with the minimum wage increase back in February. Furthermore, the company retains strong brand loyalty with over 100m loyalty club members.
In particular, it's great to see that the company is investing heavily into its business, and along with a high rate of return that has resulted in a sizeable growth in its earnings.
Having said that, the company's earnings growth is expected to slow down, as forecast in the current analyst estimates. Are these analysts' expectations based on the general expectations for the industry or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company.
Simply Wall St analyst Stjepan Kalinic and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | With a 3-year median payout ratio of 30% (implying that the company retains 70% of its profits), it seems that Costco Wholesale is reinvesting efficiently in a way that it sees a respectable amount of growth in its earnings and pays a dividend that's well covered. After a slump in the first quarter, Costco Wholesale (NASDAQ: COST) rallied to make new highs. View our latest analysis for Costco Wholesale Earnings Results Non-GAAP EPS: US$3.90 (beat by US$0.36) GAAP EPS: US$3.76 (beat by US$0.18) Revenue: US$62.68b (beat by US$1.23b) By the results, it looks like Costco is winning on all fronts. | View our latest analysis for Costco Wholesale Earnings Results Non-GAAP EPS: US$3.90 (beat by US$0.36) GAAP EPS: US$3.76 (beat by US$0.18) Revenue: US$62.68b (beat by US$1.23b) By the results, it looks like Costco is winning on all fronts. Next, comparing with the industry net income growth, we found that Costco Wholesale's growth is relatively high compared to the industry average growth of 7.9% in the same period, which is great to see. After a slump in the first quarter, Costco Wholesale (NASDAQ: COST) rallied to make new highs. | Costco Wholesale's Earnings Growth And 28% ROE First thing first, we like that Costco Wholesale has an impressive ROE. With a 3-year median payout ratio of 30% (implying that the company retains 70% of its profits), it seems that Costco Wholesale is reinvesting efficiently in a way that it sees a respectable amount of growth in its earnings and pays a dividend that's well covered. After a slump in the first quarter, Costco Wholesale (NASDAQ: COST) rallied to make new highs. | Costco Wholesale's Earnings Growth And 28% ROE First thing first, we like that Costco Wholesale has an impressive ROE. Is Costco Wholesale Using Its Retained Earnings Effectively? After a slump in the first quarter, Costco Wholesale (NASDAQ: COST) rallied to make new highs. | null |
14,020 | 626,194 | 2021-09-27 00:00:00 UTC | Costco Earnings: Another Strong Quarter | COST | https://www.nasdaq.com/articles/costco-earnings%3A-another-strong-quarter-2021-09-27 | null | null | The COVID-19 pandemic provided a huge boost for Costco Wholesale (NASDAQ: COST). People who were eating at home more frequently found buying in bulk attractive. Moreover, consumers have ramped up spending on discretionary and big-ticket items like home furnishings, sporting goods, furniture, electronics, and appliances (all of which Costco carries).
Some of the warehouse club giant's earnings tailwinds have started to abate in recent months. Nevertheless, Costco reported impressive earnings results for the final quarter of its 2021 fiscal year last week. Let's take a look.
Gross margin gains start to subside
For most of fiscal 2021, Costco logged strong increases in core gross margin. The fresh foods department led the way, as surging customer traffic and sales reduced food waste and boosted labor productivity for prepared foods.
That trend shifted in the fourth quarter. Although traffic to Costco's warehouses remained quite strong -- adjusted comparable sales rose 9.4% -- the company faced a tough year-over-year comparison. Meanwhile, inflation has been heating up across a wide variety of products. Costco has passed some price increases through to its customers, but it has worked to delay or mitigate those increases. This caused Costco's core gross margin as a percentage of core sales to decline by 0.4 percentage points year over year last quarter.
On the bright side, Costco's ancillary businesses are recovering rapidly after getting hit hard by the pandemic. Improving margins there offset most of the gross margin pressure in the retailer's core merchandise categories. As a result, reported gross margin decreased by 0.32 percentage points year over year.
Earnings still exceeded expectations
Despite increasing gross margin pressure -- particularly in fresh foods -- Costco easily beat the analyst consensus for earnings per share last quarter. EPS totaled $3.76, and excluding an $84 million pre-tax write-off of technology assets, EPS would have reached $3.90. This beat the average analyst estimate of $3.57 by 9%.
Image source: Costco Wholesale.
A year ago, Costco posted Q4 EPS of $3.13, or $3.04 excluding a pair of special items. That result included $0.47 per share of incremental pandemic-related costs.
In other words, the removal of the pandemic-related costs that Costco incurred during 2020 drove the majority of the company's earnings growth last quarter. However, strong sales growth also boosted its underlying earnings, despite a modest amount of margin pressure.
Membership fee growth is the key
The most impressive aspect of Costco's performance last quarter (and throughout fiscal 2021) was its membership fee growth. Fee income has historically accounted for the bulk of the company's earnings. Last quarter, membership fee revenue rose 11.7% year over year to $1.23 billion. Even excluding the benefit of a weaker U.S. dollar, membership fee income increased 9.7%.
Costco ended fiscal 2021 with 61.7 million paid member households. That represented a 6.2% increase from the 58.1 million members it had at the end of fiscal 2020. Moreover, as spending per household has risen, the executive membership -- which costs twice as much but offers 2% cash back on most purchases, among other perks -- has become more attractive for many Costco shoppers. The number of executive members jumped 13.3% last year to 25.6 million.
Membership fee income could continue to grow at a strong pace over the next few years. First, Costco's always-strong renewal rate improved further last year. Second, the company plans to open more warehouses in fiscal 2022 than it did over the past year. That includes some key openings in international markets, which tend to have more members per warehouse. Third, based on historical precedent, Costco is likely to raise its membership fees sometime next year. That would turbocharge the growth rate of fee income.
While inflation (and Costco's efforts to hold down prices) could cause gross margin compression this year, those changes would likely be temporary. By contrast, membership fee income has proven to be very durable over the years. That makes Costco's strong membership fee growth a great sign for the future.
10 stocks we like better than Costco Wholesale
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Adam Levine-Weinberg owns shares of Costco Wholesale. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Moreover, consumers have ramped up spending on discretionary and big-ticket items like home furnishings, sporting goods, furniture, electronics, and appliances (all of which Costco carries). Although traffic to Costco's warehouses remained quite strong -- adjusted comparable sales rose 9.4% -- the company faced a tough year-over-year comparison. Moreover, as spending per household has risen, the executive membership -- which costs twice as much but offers 2% cash back on most purchases, among other perks -- has become more attractive for many Costco shoppers. | This caused Costco's core gross margin as a percentage of core sales to decline by 0.4 percentage points year over year last quarter. Earnings still exceeded expectations Despite increasing gross margin pressure -- particularly in fresh foods -- Costco easily beat the analyst consensus for earnings per share last quarter. The COVID-19 pandemic provided a huge boost for Costco Wholesale (NASDAQ: COST). | This caused Costco's core gross margin as a percentage of core sales to decline by 0.4 percentage points year over year last quarter. Earnings still exceeded expectations Despite increasing gross margin pressure -- particularly in fresh foods -- Costco easily beat the analyst consensus for earnings per share last quarter. Membership fee growth is the key The most impressive aspect of Costco's performance last quarter (and throughout fiscal 2021) was its membership fee growth. | Earnings still exceeded expectations Despite increasing gross margin pressure -- particularly in fresh foods -- Costco easily beat the analyst consensus for earnings per share last quarter. The COVID-19 pandemic provided a huge boost for Costco Wholesale (NASDAQ: COST). Moreover, consumers have ramped up spending on discretionary and big-ticket items like home furnishings, sporting goods, furniture, electronics, and appliances (all of which Costco carries). | null |
14,021 | 626,195 | 2021-09-26 00:00:00 UTC | 3 Standout Numbers From Costco's Earnings Release | COST | https://www.nasdaq.com/articles/3-standout-numbers-from-costcos-earnings-release-2021-09-26 | null | null | Costco (NASDAQ: COST) recently closed out its fiscal 2021 in impressive fashion. The warehouse retailer beat Wall Street expectations on sales and earnings despite several major headwinds, including soaring inflation and supply chain bottlenecks.
In a conference call with Wall Street analysts, executives broke down those hits and misses while sounding a generally positive tone about the new fiscal year ahead. Let's look at a few standout figures from that presentation.
Image source: Getty Images.
1. Renewal rate: Up 0.3 percentage points
While Costco books nearly $200 billion in annual revenue, its more helpful to think of its business as a subscription club rather than a retailer. Membership fees account for most of its earnings each year, after all.
That's why the subscription renewal rate is arguably the most important single metric Costco reports each quarter. A healthy and rising rate here demonstrates customer satisfaction and lays the groundwork for fee increases over time.
That rate rose to 90.3% in the core U.S. market and 88.7% worldwide. Both figures were up 0.3 percentage points compared to three months ago and are close to record highs. CFO Richard Galanti said part of that success can be pinned on automatic renewals, and on the increasing penetration of its premium, executive level membership tier. Costco added over 1 million of these customers in the fourth quarter, which helped push fee income to $1.2 billion from $1.1 billion a year ago.
2. Inflation: up to 4.5%
Costco's estimate of cost inflation keeps marching higher. Executives two quarters ago said overall price hikes were running at about 1%, before they lifted that prediction to between 2.5% and 3.5%. Today, that boost is ranging from 3.5% to 4.5% and touches everything from fresh produce to dairy, meat, and home consumable products like trash bags, plastic wrap, and aluminum foil.
Costco thrives in this type of environment because it can use its massive sales base to keep prices lower than rivals. Inflation helps highlight the warehouse giant's price leadership position, too, which supports shopper satisfaction.
That helps explain why management was proud to report having kept prices down despite soaring costs. "We elected to hold, delay, and/or mitigate some of the price increases in this increasingly inflationary environment," Galanti said.
3. Shipping container costs: up 500%
The global shipping industry is still far from normal operations, with retailers today scrambling to secure enough products ahead of the holiday shopping season. Executives said in some cases they're being charged six times the regular rate for shipping containers.
Costco is responding to this historic supply chain stress by increasing lead times for ordering. It has also purchased its own vessels, with three ships on lease to carry its own merchandise exclusively over the next year. This "Costco fleet" can move as many as 30,000 containers between Asia, the U.S., and Canada in that time. "It's a lot of fun right now," Galanti joked.
The good news is that Costco seems to be using its competitive advantages like scale to navigate through this challenging environment better than most of its peers. That success is helping it win more market share and a growing base of highly satisfied members. And higher earnings tend to flow directly from those sales wins. "We are a top-line [focused] company," Galanti said, "and everything else will take care of itself."
10 stocks we like better than Costco Wholesale
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Demitri Kalogeropoulos owns shares of Costco Wholesale. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Costco (NASDAQ: COST) recently closed out its fiscal 2021 in impressive fashion. Renewal rate: Up 0.3 percentage points While Costco books nearly $200 billion in annual revenue, its more helpful to think of its business as a subscription club rather than a retailer. That's why the subscription renewal rate is arguably the most important single metric Costco reports each quarter. | Costco added over 1 million of these customers in the fourth quarter, which helped push fee income to $1.2 billion from $1.1 billion a year ago. The Motley Fool owns shares of and recommends Costco Wholesale. Costco (NASDAQ: COST) recently closed out its fiscal 2021 in impressive fashion. | Renewal rate: Up 0.3 percentage points While Costco books nearly $200 billion in annual revenue, its more helpful to think of its business as a subscription club rather than a retailer. Costco added over 1 million of these customers in the fourth quarter, which helped push fee income to $1.2 billion from $1.1 billion a year ago. See the 10 stocks *Stock Advisor returns as of September 17, 2021 Demitri Kalogeropoulos owns shares of Costco Wholesale. | Costco (NASDAQ: COST) recently closed out its fiscal 2021 in impressive fashion. Renewal rate: Up 0.3 percentage points While Costco books nearly $200 billion in annual revenue, its more helpful to think of its business as a subscription club rather than a retailer. That's why the subscription renewal rate is arguably the most important single metric Costco reports each quarter. | null |
14,022 | 626,197 | 2021-09-25 00:00:00 UTC | 2 Safe Dividend Growth Stocks You Can Buy and Forget About | COST | https://www.nasdaq.com/articles/2-safe-dividend-growth-stocks-you-can-buy-and-forget-about-2021-09-25 | null | null | Dividend growth stocks can make for underrated investments. Although their yields might be just a few percentage points today, annual rate hikes could result in earning much more on your initial investment over time. For example, a company that grows its payout annually by an average of 7.2% would double its dividend payments within 10 years.
But you also don't want to take on too much risk with a dividend growth stock since there's no guarantee the payouts will continue. Becton, Dickinson (NYSE: BDX) and Costco Wholesale (NASDAQ: COST) are two stocks that look poised to keep increasing their dividend payments and aren't risky buys.
Image source: Getty Images.
1. Becton, Dickinson
Medical supply company Becton, Dickinson currently pays its shareholders a modest dividend yield of 1.3%, which is right around the S&P 500 average. But it's been growing those dividends steadily for a long time, and there's a lot to like about the business.
Thanks to a broad array of products and services, Becton has weathered the challenges of COVID-19 and continued to post strong numbers. For the nine months ended June 30, revenue totaled $15.1 billion, up 23% over the year-ago period, and net income more than doubled to $1.8 billion.
In its latest results, the healthcare company noted that it was "recovering to pre-pandemic levels." Each of its major business units -- medical, life sciences (excluding COVID-19 testing), and interventional -- were up compared to the same period in 2019.
Plus, the business has generated a solid profit margin of 10% over the trailing 12 months. And with a diluted per-share profit of $6.33, that's easily enough to cover the $3.32 that it will pay in dividends per share this year, putting its payout ratio at just over 50%.
No only can the company afford to increase its payouts, but it has an incredibly large incentive to do so. A dividend increase this year would mark the 50th consecutive annual hike it has made, putting Becton into an exclusive group of Dividend Kings. Companies that fall into that category are regarded as among the safest dividend growth stocks. So you can bet that unless something drastic happens with the business, it will likely keep that streak going.
The rate of dividend growth has been good too. Over five years, the company has increased its dividend payments by a compound annual growth rate (CAGR) of 4.7%. If Becton has been able to raise its payouts all this time -- including a pandemic year -- that's a good sign of its stability. And it could make for an ideal stock to just buy and forget about.
2. Costco Wholesale
Big-box retailer Costco is another solid dividend stock to consider. Not only was it stable during the pandemic, but the company thrived as consumers stocked up on day-to-day essentials. And the business remains in good shape today.
Costco just released its fourth-quarter earnings and net sales rose by 18% year over year to $61.4 billion. Net income came in 20% higher at $1.7 billion. While e-commerce sales growth of 11% wasn't anywhere near the 91% increase investors saw a year ago, the company continued to build on those numbers while delivering a solid overall growth rate.
And despite a profit margin of less than 3%, the company's $190 billion in revenue over the past four quarters leaves it plenty of profit to help pay the dividend. Its diluted earnings per share of $10.60 during that time puts the company's payout ratio at just 30%.
The dividend yield you'll initially get from Costco isn't so impressive; at just 0.7%, it won't take much time to find a higher payout among stocks out there. But it's been increasing those dividends at a good clip. Five years ago, Costco was paying a quarterly dividend of $0.45. It has increased those payouts by 76% since then, averaging a CAGR of 12%. If the company were to keep that rate of increase going, the dividend would double after about six years.
And it's been hiking the dividend since 2005. True, that isn't as long as a Dividend Aristocrat -- let alone a King like Becton, Dickinson is about to be -- but over time, Costco looks to be a safe bet to end up there.
What's more, the company last year rewarded shareholders with a special dividend of $10 per share -- more than three times its annual payout right now. While shareholders shouldn't expect something like that all the time, it demonstrates the company's commitment to rewarding and distributing its wealth out to them.
Whether you see it as a recovery stock or as one that will benefit from stay-at-home orders, Costco looks to be a solid and safe income stock to own for the long haul.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool recommends Becton, Dickinson. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Becton, Dickinson (NYSE: BDX) and Costco Wholesale (NASDAQ: COST) are two stocks that look poised to keep increasing their dividend payments and aren't risky buys. True, that isn't as long as a Dividend Aristocrat -- let alone a King like Becton, Dickinson is about to be -- but over time, Costco looks to be a safe bet to end up there. Costco Wholesale Big-box retailer Costco is another solid dividend stock to consider. | Becton, Dickinson (NYSE: BDX) and Costco Wholesale (NASDAQ: COST) are two stocks that look poised to keep increasing their dividend payments and aren't risky buys. Costco Wholesale Big-box retailer Costco is another solid dividend stock to consider. Costco just released its fourth-quarter earnings and net sales rose by 18% year over year to $61.4 billion. | Becton, Dickinson (NYSE: BDX) and Costco Wholesale (NASDAQ: COST) are two stocks that look poised to keep increasing their dividend payments and aren't risky buys. The dividend yield you'll initially get from Costco isn't so impressive; at just 0.7%, it won't take much time to find a higher payout among stocks out there. Costco Wholesale Big-box retailer Costco is another solid dividend stock to consider. | Becton, Dickinson (NYSE: BDX) and Costco Wholesale (NASDAQ: COST) are two stocks that look poised to keep increasing their dividend payments and aren't risky buys. Costco Wholesale Big-box retailer Costco is another solid dividend stock to consider. Costco just released its fourth-quarter earnings and net sales rose by 18% year over year to $61.4 billion. | null |
14,023 | 626,204 | 2021-09-24 00:00:00 UTC | 5 Top Consumer Stocks To Watch Ahead Of October 2021 | COST | https://www.nasdaq.com/articles/5-top-consumer-stocks-to-watch-ahead-of-october-2021-2021-09-24 | null | null | Do You Have These Top Consumer Stocks On Your Radar Now?
The past trading week has been exciting, to say the least. Despite all of the ups and downs, consumer stocks continue to make waves in the stock market today. If anything, the consumer-focused industry continues to hold strong now. This is evident as August’s retail sales figures smashed expectations, rising by 0.7% versus an estimated drop of 0.8%. Moreover, the current broad-based rebound in the stock market could indicate that investors’ sentiment on the economy is improving.
Evidently, we could look at the likes of Roku (NASDAQ: ROKU) right now. Just yesterday, Guggenheim analyst Michael Morris provided a positive update on the stock. Namely, Morris hit ROKU stock with a Buy rating and a price target of $395. Morris cites Roku’s aggressive expansion of its original content and penetration of international markets as core reasons for the upgrade.
At the same time, there is some interesting movement going on with Nike’s (NYSE: NKE) shares as well. Yesterday, the company posted its first-quarter earnings after the closing bell. In short, Nike reported an earnings per share of $1.16 on revenue of $12.25 billion for the quarter. This is against estimates of $1.11 and $12.46 billion. Investors appear to be focusing on Nike’s revenue miss which is mostly due to temporary supply chain pressures. Regardless, as one of the biggest names in the sports apparel industry globally, some could see opportunity in NKE stocks’ current weakness. With all this activity in the space now, could one of these consumer stocks be worth investing in?
Best Consumer Stocks To Buy [Or Sell] Today
Beyond Meat Inc. (NASDAQ: BYND)
Trip.com Group Ltd. (NASDAQ: TCOM)
Vail Resorts Inc. (NYSE: MTN)
Costco Wholesale Corporation (NASDAQ: COST)
Stitch Fix Inc. (NASDAQ: SFIX)
Beyond Meat Inc.
Beyond Meat is a plant-based meat substitutes retailer with headquarters in California. The company offers plant-based options in the beef, poultry, and pork categories. In fact, it is one of the fastest-growing food companies in the U.S. as more people are increasingly alternating to plant-based options. Its products are designed to have the same taste and texture as animal-based meat while being the better option for the environment. BYND stock has almost doubled in valuation since its pandemic era low.
In August, the company reported its second-quarter financials. Diving in, net revenue for the quarter was $149.4 million, increasing by 31.8% year-over-year. Furthermore, gross profit for the quarter was $47.4 million. The company saw record net revenues and also continues to return to growth in the foodservice industry as its customers welcome consumers back to their venues. Not resting on its laurels, the company also continues to make substantial investments in its long-term growth in the U.S. and abroad. Given all of this, will you consider investing in BYND stock right now?
Source: TD Ameritrade TOS
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Trip.com Group Ltd
Following that, we have multinational online travel company Trip.com, a leading one-stop travel platform globally. It integrates a comprehensive suite of travel products and services and differentiated travel content. It is the go-to destination for travelers in China and around the world. Impressively, it is currently one of the largest online travel agencies in China and also one of the largest travel service providers in the world.
After yesterday’s closing bell, Trip.com posted solid figures in its second fiscal quarter earnings report. In it, the company saw a total revenue of $912 million for the quarter. This marks a significant year-over-year jump of 86%. In terms of net income, the company saw a 43% increase over the same period. CEO Jane Sun cites Trip.com’s focus on the domestic market as a core contributor to this solid quarter for the company. Overall, given this piece of news, will you consider adding TCOM stock to your portfolio right now?
Source: TD Ameritrade TOS
Vail Resorts Inc.
Vail Resorts is a leading global mountain resort operator. The company and its subsidiaries operate 37 destination mountain resorts and regional ski areas. In essence, it owns and/or manages a collection of casually elegant hotels under the RockResorts brand. It also has a development company that is in the real estate planning and development business. MTN stock is up by over 40% in the past year alone.
Recently, KeyBanc Capital Markets upgraded Vail Resorts to an Overweight rating from Sector Weight and hit it with a price target of $355. Analyst Brett Andreas says that demand for skiing vacations was exceeding expectations with some bookings already at record levels. Not to mention, the company continues to gain momentum on the financial front. In its fourth fiscal quarterearnings call Vail reported a net income of $127.9 million, marking a sizable 29.4% year-over-year increase. After considering that pandemic-related factors still weigh on its key operations, the company’s fundamentals are admirable. Moreover, the company also declared a cash dividend of $0.88 per share, to investors’ delight. All things considered, will you buy MTN stock?
Source: TD Ameritrade TOS
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Costco Wholesale Corporation
Next up, we will be taking a look at Costco. For the most part, the multinational consumer staples giant would be another player to consider in the stock market today. The main factor differentiating Costco from its retail competitors would be its membership-only big-box operations. Simply put, the company only caters to members and sells daily necessities in bulk. Amidst the ongoing pandemic and climate crises, Costco’s offerings could see greater demand from consumers.
By and large, with COST stock sitting on year-to-date gains of over 19%, could it be worth investing in? Well, for one thing, the company beat Wall Streets’ projections across the board in its latest quarterly earnings report. In detail, Costco posted an earnings per share of $3.76 on revenue of $62.7 billion for the quarter. For some perspective, consensus estimates suggest an earnings per share of $3.59 on revenue of $61.6 billion. All in all, would you consider adding COST stock to your portfolio?
Source: TD Ameritrade TOS
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Stitch Fix Inc.
Another name to know in the consumer stock space now would be Stitch Fix. In brief, it is an online personal styling service. Through a combination of artificial intelligence and data science, Stitch Fix provides customers with personalized e-commerce experiences. Given the prevalence of online shopping throughout the pandemic, SFIX stock could be in focus among investors. In fact, the company’s shares are up by over 15% just this week on account of its solid earnings report.
Notably, Stitch Fix raked in a total revenue of $571.16 million for the quarter, marking a 28% year-over-year increase. Additionally, the company also reported massive year-over-year spikes of over 145% in both its net income and earnings per share. Despite beating analyst estimates on these fronts, Stitch Fix does not seem to be slowing down anytime soon. This appears to be the case as the company is expanding its services with Stitch Fix Freestyle, a “differentiated shopping experience”. This would give customers a more instant and flexible means of shopping on its platform. As such, could SFIX stock be a top pick in the stock market now?
Source: TD Ameritrade TOS
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Best Consumer Stocks To Buy [Or Sell] Today Beyond Meat Inc. (NASDAQ: BYND) Trip.com Group Ltd. (NASDAQ: TCOM) Vail Resorts Inc. (NYSE: MTN) Costco Wholesale Corporation (NASDAQ: COST) Stitch Fix Inc. (NASDAQ: SFIX) Beyond Meat Inc. Source: TD Ameritrade TOS [Read More] 4 Semiconductor Stocks To Watch Right Now Costco Wholesale Corporation Next up, we will be taking a look at Costco. The main factor differentiating Costco from its retail competitors would be its membership-only big-box operations. | Best Consumer Stocks To Buy [Or Sell] Today Beyond Meat Inc. (NASDAQ: BYND) Trip.com Group Ltd. (NASDAQ: TCOM) Vail Resorts Inc. (NYSE: MTN) Costco Wholesale Corporation (NASDAQ: COST) Stitch Fix Inc. (NASDAQ: SFIX) Beyond Meat Inc. Source: TD Ameritrade TOS [Read More] 4 Semiconductor Stocks To Watch Right Now Costco Wholesale Corporation Next up, we will be taking a look at Costco. The main factor differentiating Costco from its retail competitors would be its membership-only big-box operations. | Best Consumer Stocks To Buy [Or Sell] Today Beyond Meat Inc. (NASDAQ: BYND) Trip.com Group Ltd. (NASDAQ: TCOM) Vail Resorts Inc. (NYSE: MTN) Costco Wholesale Corporation (NASDAQ: COST) Stitch Fix Inc. (NASDAQ: SFIX) Beyond Meat Inc. Source: TD Ameritrade TOS [Read More] 4 Semiconductor Stocks To Watch Right Now Costco Wholesale Corporation Next up, we will be taking a look at Costco. The main factor differentiating Costco from its retail competitors would be its membership-only big-box operations. | Best Consumer Stocks To Buy [Or Sell] Today Beyond Meat Inc. (NASDAQ: BYND) Trip.com Group Ltd. (NASDAQ: TCOM) Vail Resorts Inc. (NYSE: MTN) Costco Wholesale Corporation (NASDAQ: COST) Stitch Fix Inc. (NASDAQ: SFIX) Beyond Meat Inc. Source: TD Ameritrade TOS [Read More] 4 Semiconductor Stocks To Watch Right Now Costco Wholesale Corporation Next up, we will be taking a look at Costco. The main factor differentiating Costco from its retail competitors would be its membership-only big-box operations. | null |
14,024 | 626,205 | 2021-09-23 00:00:00 UTC | After-Hours Earnings Report for September 23, 2021 : NKE, COST, MTN, TCOM, PRGS, AIR, CAMP, AGTC, RSSS | COST | https://www.nasdaq.com/articles/after-hours-earnings-report-for-september-23-2021-%3A-nke-cost-mtn-tcom-prgs-air-camp-agtc | null | null | The following companies are expected to report earnings after hours on 09/23/2021. Visit our Earnings Calendar for a full list of expected earnings releases.
Nike, Inc. (NKE)is reporting for the quarter ending August 31, 2021. The shoes & retail apparel company's consensus earnings per share forecast from the 10 analysts that follow the stock is $1.12. This value represents a 17.89% increase compared to the same quarter last year. In the past year NKE has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 82.35%. Zacks Investment Research reports that the 2022 Price to Earnings ratio for NKE is 37.85 vs. an industry ratio of 20.60, implying that they will have a higher earnings growth than their competitors in the same industry.
Costco Wholesale Corporation (COST)is reporting for the quarter ending August 31, 2021. The discount retail company's consensus earnings per share forecast from the 11 analysts that follow the stock is $3.55. This value represents a 13.42% increase compared to the same quarter last year. COST missed the consensus earnings per share in the 1st calendar quarter of 2021 by -11.57%. Zacks Investment Research reports that the 2021 Price to Earnings ratio for COST is 42.43 vs. an industry ratio of 23.80, implying that they will have a higher earnings growth than their competitors in the same industry.
Vail Resorts, Inc. (MTN)is reporting for the quarter ending July 31, 2021. The leisure (recreational) company's consensus earnings per share forecast from the 9 analysts that follow the stock is $-3.59. This value represents a 6.02% increase compared to the same quarter last year. Zacks Investment Research reports that the 2021 Price to Earnings ratio for MTN is 101.42 vs. an industry ratio of -21.10, implying that they will have a higher earnings growth than their competitors in the same industry.
Trip.com Group Limited (TCOM)is reporting for the quarter ending June 30, 2021. The leisure (recreational) company's consensus earnings per share forecast from the 1 analyst that follows the stock is $-0.04. This value represents a 89.74% increase compared to the same quarter last year. In the past year TCOM has beat the expectations every quarter. The highest one was in the 1st calendar quarter where they beat the consensus by 74.47%. Zacks Investment Research reports that the 2021 Price to Earnings ratio for TCOM is -1446.00 vs. an industry ratio of -21.10.
Progress Software Corporation (PRGS)is reporting for the quarter ending August 31, 2021. The computer software company's consensus earnings per share forecast from the 2 analysts that follow the stock is $0.70. This value represents a 4.48% increase compared to the same quarter last year. In the past year PRGS has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 13.56%. The "days to cover" for this stock exceeds 11 days. Zacks Investment Research reports that the 2021 Price to Earnings ratio for PRGS is 15.43 vs. an industry ratio of 49.60.
AAR Corp. (AIR)is reporting for the quarter ending August 31, 2021. The aerospace and defense company's consensus earnings per share forecast from the 1 analyst that follows the stock is $0.49. This value represents a 188.24% increase compared to the same quarter last year. In the past year AIR has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 6.82%. Zacks Investment Research reports that the 2022 Price to Earnings ratio for AIR is 12.35 vs. an industry ratio of 46.70.
CalAmp Corp. (CAMP)is reporting for the quarter ending August 31, 2021. The electrical instrument company's consensus earnings per share forecast from the 3 analysts that follow the stock is $-0.02. This value represents a 80.00% increase compared to the same quarter last year. In the past year CAMP has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 200%. Zacks Investment Research reports that the 2022 Price to Earnings ratio for CAMP is 71.79 vs. an industry ratio of 23.40, implying that they will have a higher earnings growth than their competitors in the same industry.
Applied Genetic Technologies Corporation (AGTC)is reporting for the quarter ending June 30, 2021. The biomedical (gene) company's consensus earnings per share forecast from the 4 analysts that follow the stock is $-0.37. This value represents a 33.93% increase compared to the same quarter last year. Zacks Investment Research reports that the 2021 Price to Earnings ratio for AGTC is -1.78 vs. an industry ratio of -2.20, implying that they will have a higher earnings growth than their competitors in the same industry.
Research Solutions, Inc (RSSS)is reporting for the quarter ending June 30, 2021. The printing company's consensus earnings per share forecast from the 1 analyst that follows the stock is $0.00. This value represents a no change for the same quarter last year. In the past year RSSS Zacks Investment Research reports that the 2021 Price to Earnings ratio for RSSS is 85.00 vs. an industry ratio of 85.30.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Costco Wholesale Corporation (COST)is reporting for the quarter ending August 31, 2021. COST missed the consensus earnings per share in the 1st calendar quarter of 2021 by -11.57%. Zacks Investment Research reports that the 2021 Price to Earnings ratio for COST is 42.43 vs. an industry ratio of 23.80, implying that they will have a higher earnings growth than their competitors in the same industry. | Zacks Investment Research reports that the 2021 Price to Earnings ratio for COST is 42.43 vs. an industry ratio of 23.80, implying that they will have a higher earnings growth than their competitors in the same industry. Costco Wholesale Corporation (COST)is reporting for the quarter ending August 31, 2021. COST missed the consensus earnings per share in the 1st calendar quarter of 2021 by -11.57%. | Zacks Investment Research reports that the 2021 Price to Earnings ratio for COST is 42.43 vs. an industry ratio of 23.80, implying that they will have a higher earnings growth than their competitors in the same industry. Costco Wholesale Corporation (COST)is reporting for the quarter ending August 31, 2021. COST missed the consensus earnings per share in the 1st calendar quarter of 2021 by -11.57%. | Costco Wholesale Corporation (COST)is reporting for the quarter ending August 31, 2021. COST missed the consensus earnings per share in the 1st calendar quarter of 2021 by -11.57%. Zacks Investment Research reports that the 2021 Price to Earnings ratio for COST is 42.43 vs. an industry ratio of 23.80, implying that they will have a higher earnings growth than their competitors in the same industry. | null |
14,025 | 626,213 | 2021-09-22 00:00:00 UTC | Noteworthy ETF Inflows: SSO, DIS, COST, T | COST | https://www.nasdaq.com/articles/noteworthy-etf-inflows%3A-sso-dis-cost-t-2021-09-22 | null | null | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the ProShares Ultra S&P500 (Symbol: SSO) where we have detected an approximate $269.6 million dollar inflow -- that's a 6.2% increase week over week in outstanding units (from 35,500,000 to 37,700,000). Among the largest underlying components of SSO, in trading today Walt Disney Co. (Symbol: DIS) is up about 2%, Costco Wholesale Corp (Symbol: COST) is down about 0.1%, and AT&T Inc (Symbol: T) is up by about 0.5%. For a complete list of holdings, visit the SSO Holdings page » The chart below shows the one year price performance of SSO, versus its 200 day moving average:
Looking at the chart above, SSO's low point in its 52 week range is $67.07 per share, with $133.67 as the 52 week high point — that compares with a last trade of $124.68. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
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Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of SSO, in trading today Walt Disney Co. (Symbol: DIS) is up about 2%, Costco Wholesale Corp (Symbol: COST) is down about 0.1%, and AT&T Inc (Symbol: T) is up by about 0.5%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the ProShares Ultra S&P500 (Symbol: SSO) where we have detected an approximate $269.6 million dollar inflow -- that's a 6.2% increase week over week in outstanding units (from 35,500,000 to 37,700,000). These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | Among the largest underlying components of SSO, in trading today Walt Disney Co. (Symbol: DIS) is up about 2%, Costco Wholesale Corp (Symbol: COST) is down about 0.1%, and AT&T Inc (Symbol: T) is up by about 0.5%. For a complete list of holdings, visit the SSO Holdings page » The chart below shows the one year price performance of SSO, versus its 200 day moving average: Looking at the chart above, SSO's low point in its 52 week range is $67.07 per share, with $133.67 as the 52 week high point — that compares with a last trade of $124.68. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ». | Among the largest underlying components of SSO, in trading today Walt Disney Co. (Symbol: DIS) is up about 2%, Costco Wholesale Corp (Symbol: COST) is down about 0.1%, and AT&T Inc (Symbol: T) is up by about 0.5%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the ProShares Ultra S&P500 (Symbol: SSO) where we have detected an approximate $269.6 million dollar inflow -- that's a 6.2% increase week over week in outstanding units (from 35,500,000 to 37,700,000). For a complete list of holdings, visit the SSO Holdings page » The chart below shows the one year price performance of SSO, versus its 200 day moving average: Looking at the chart above, SSO's low point in its 52 week range is $67.07 per share, with $133.67 as the 52 week high point — that compares with a last trade of $124.68. | Among the largest underlying components of SSO, in trading today Walt Disney Co. (Symbol: DIS) is up about 2%, Costco Wholesale Corp (Symbol: COST) is down about 0.1%, and AT&T Inc (Symbol: T) is up by about 0.5%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the ProShares Ultra S&P500 (Symbol: SSO) where we have detected an approximate $269.6 million dollar inflow -- that's a 6.2% increase week over week in outstanding units (from 35,500,000 to 37,700,000). For a complete list of holdings, visit the SSO Holdings page » The chart below shows the one year price performance of SSO, versus its 200 day moving average: Looking at the chart above, SSO's low point in its 52 week range is $67.07 per share, with $133.67 as the 52 week high point — that compares with a last trade of $124.68. | null |
14,026 | 626,215 | 2021-09-21 00:00:00 UTC | September Sell-Off: These 3 Growth Stocks Just Went on Sale | COST | https://www.nasdaq.com/articles/september-sell-off%3A-these-3-growth-stocks-just-went-on-sale-2021-09-21 | null | null | The stock market's volatility in recent days has been a reminder that more or less steady long-term capital gains are often interrupted by periods of quick declines. As the old saying goes, "Stocks take the stairs up, but the elevator down."
Investors can ignore short-term slumps for the most part -- except if they're hunting for bargains. With that idea in mind, let's look at three attractive growth stocks, Target (NYSE: TGT), Garmin (NASDAQ: GRMN), and eBay (NASDAQ: EBAY), which have fallen from all-time highs and might represent even better buys today.
Image source: Getty Images.
1. eBay
eBay handles enough merchandise volume to make it one of the biggest e-commerce retailers on the planet. However, its middleman selling approach makes it much more financially efficient than its peers. The marketplace giant routinely generates over $3 billion in operating cash, or well over 30% of sales, for example.
Its growth rate has been impressive since the pandemic struck, which doesn't separate it from rivals such as Walmart and Amazon. But eBay is winning share in some key niches that its buyers love. For instance, its collectible sneaker and luxury watch categories are booming.
eBay's margins are rising as it finds more ways to add value for its sellers, which, in turn, allows it to raise transaction fees. That fundamental profit metric recently crossed 11% of sales, in fact.
Investor returns from here should continue to be lifted by those gains and by eBay's stock buybacks and dividend. The stock's roughly 7% decline in recent days might not be the end of its pullback, but it has made the stock more attractive.
2. Target
Target is sitting about 8% below the all-time highs the chain set in mid-August. And sure, there are some reasons to worry about a potential growth slowdown. Shipping bottlenecks might pressure earnings in the second half of 2021, too.
But this business has to date given investors no reason to think its business is losing momentum. Comparable-store sales grew 9% in the second quarter, on top of the record 24% spike a year ago. Target is still gaining market share in areas like home furnishings and consumer electronics, and shoppers are thrilled with the tight integration between its online and in-store selling channels.
Yes, Target is still far more expensive than peers like Costco and Walmart. There's a good reason for that premium, though -- it's holding on to more of its revenue as operating profit. The chain is bumping up against 10% operating margins, which is double Walmart's and roughly three-times Costco's comparable figure.
TGT Operating Margin (TTM) data by YCharts.
That success alone should be enough to keep Target on your watch list during stock price downturns like these.
3. Garmin
Garmin shares are down about 7% from all-time highs set in late August. That's an admittedly modest discount for a stock that's still trouncing the market so far in 2021.
However, the navigation-device giant is having a banner year, even following soaring growth in 2020. Sales gains accelerated last quarter and are booming across segments ranging from smartwatches to marine navigation. Margins are climbing toward 30% of sales, putting it in the same league as Apple.
Garmin would suffer from an economic growth slowdown, should one hit in late 2021. But right now, the business is on track for another big sales year, along with rising margins, thanks in part to a flood of innovative tech releases.
You could wait to see if this stellar business becomes more attractive through further price declines. Or you could take advantage of the recent discount and start a position in this growth stock today.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Demitri Kalogeropoulos owns shares of Amazon, Apple, and Costco Wholesale. The Motley Fool owns shares of and recommends Amazon, Apple, and Costco Wholesale. The Motley Fool recommends Garmin and eBay and recommends the following options: long January 2022 $1,920 calls on Amazon, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, short March 2023 $130 calls on Apple, and short October 2021 $70 calls on eBay. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Yes, Target is still far more expensive than peers like Costco and Walmart. The chain is bumping up against 10% operating margins, which is double Walmart's and roughly three-times Costco's comparable figure. Demitri Kalogeropoulos owns shares of Amazon, Apple, and Costco Wholesale. | The Motley Fool owns shares of and recommends Amazon, Apple, and Costco Wholesale. Yes, Target is still far more expensive than peers like Costco and Walmart. The chain is bumping up against 10% operating margins, which is double Walmart's and roughly three-times Costco's comparable figure. | Yes, Target is still far more expensive than peers like Costco and Walmart. The chain is bumping up against 10% operating margins, which is double Walmart's and roughly three-times Costco's comparable figure. Demitri Kalogeropoulos owns shares of Amazon, Apple, and Costco Wholesale. | Yes, Target is still far more expensive than peers like Costco and Walmart. The Motley Fool owns shares of and recommends Amazon, Apple, and Costco Wholesale. The chain is bumping up against 10% operating margins, which is double Walmart's and roughly three-times Costco's comparable figure. | null |
14,027 | 626,218 | 2021-09-20 00:00:00 UTC | 3 Growth Stocks to Buy Hand Over Fist Right Now | COST | https://www.nasdaq.com/articles/3-growth-stocks-to-buy-hand-over-fist-right-now-2021-09-20 | null | null | Even in a market rout there are stocks that look too good to pass up. When everything looks like it is going south, that's when savvy investors prepare to pounce.
While it's tempting to wait until all the dust has settled, that may be too late as everyone will be moving in on the bargains. That's why Ross Stores (NASDAQ: ROST), Take-Two Interactive Software (NASDAQ: TTWO), and The Original Bark Company (NYSE: BARK) are three growth stocks investors might just want to be buying hand over fist right now.
Image source: Getty Images.
Bargain retailer, bargain stock
Eric Volkman (Ross Stores): Hopefully sooner rather than later we'll finally start getting past the coronavirus pandemic. When we do, people will want and need to refresh their wardrobes, and clothing retailers will benefit. So my pick is a big player in the budget end of that segment: Ross Stores.
The company is already doing a better job than many peers at making it through the outbreak. After suffering through the mandatory store closures during the heavy part of the pandemic in early/mid-2020, Ross Stores came back with a vengeance as it began to reopen its doors.
The reopenings, pent-up consumer demand, government stimulus payments, vaccine initiatives, and well-targeted deals from the veteran bargain retailer made for a potent brew in both of its reported quarters for this year.
In the second quarter, the company blasted past both its own and analysts' expectations with a nearly 80% year-over-year rise in sales, to over $4.8 billion. With a far more powerful improvement in net income this rose more than 20-fold to $494 million. These results were achieved with a 13% rise in comparable-store sales, nearly double the top end of Ross Stores' guidance range for the quarter, which was 7%.
The company has a history of underestimating its performance. It produced a 13% improvement in comps for the first quarter, and that was after it predicted that the figure would be negative, to the tune of 1% to 5%.
So we shouldn't be surprised if Ross Stores' guidance for the third quarter falls well short of the actual results. The company is already projecting robust same-store sales growth of 10% to 11% for the entirety of 2021, with bottom-line profitability coming in at $4.20 to $4.38 per share. By the way, if realized, the latter projection would beat the pants off 2020's $0.24.
Finally, Ross Stores' stock is as attractively priced as much of its merchandise. The shares currently trade at a dirt cheap 0.25 five-year forward price-to-earnings-growth ratio, which is a deal even by the standards of the out-of-favor retail industry.
Image source: Getty Images.
Take your portfolio to the next level
Keith Noonan (Take-Two Interactive): Hit video game Grand Theft Auto V (GTA V) stands as the single most profitable entertainment release in history, and its performance has helped make Take-Two Interactive one of the industry's biggest success stories. The game has demonstrated incredible longevity and sold more than 150 million copies since its release all the way back in 2013, and its hugely popular online mode has generated billions of dollars in high-margin revenue.
Even better, Take-Two Interactive is set to release another updated version of the game for Sony's PlayStation 5 and Microsoft's next-generation Xbox consoles early next year. Not only is the new Grand Theft Auto V likely to add at least another 10 million in unit sales to the blockbuster title's lifetime sales, it will also extend the life of its incredibly profitable online multiplayer mode.
Do you hear that sound? It's the money-printing machines firing back up again. If the prospect of another highly profitable GTA V release isn't enough to get you bullish on Take-Two stock, the company is said to be readying a release that will package updated versions of three previously released hits in the franchise. And if being responsible for one of gaming's most successful and dependably bankable series still isn't enough, keep in mind that Take-Two Interactive is much more than just Grand Theft Auto.
The company's annual installments in the NBA 2K basketball franchise routinely rank among the best-selling titles in their given release year, and Take-Two's Red Dead Redemption 2 stands as one of the most successful titles of the last decade. The company is also responsible for franchises including BioShock, Civilization, and Kerbal Space Program, and its strong portfolio of established series and proven development and marketing teams should help the publisher continue to serve up strong performance and deliver big wins for shareholders.
Image source: Getty Images.
Barking up the right tree with this growth stock
Rich Duprey (The Original Bark Company): Spending on pets, pet food, and pet care continues to steadily rise, jumping almost 7% during the pandemic. The American Pet Products Association estimates it will grow another 6% this year, hitting almost $110 billion.
Because dogs are the No. 1 pet in the U.S., making up 69% of pet-owning households (compared to 45% with a cat), The Original Bark Company is poised to capitalize on the continued humanization of pets by their owners.
The APPA says most consumer spending is on food and treats, with $44 billion, or 40% of the expected total for 2021.
Bark is a subscription service for dogs; its most notable offering being its monthly BarkBox that delivers toys, treats, and supplements to a pet parent's house. Last quarter total revenue rose 57% year over year to nearly $118 million with its direct-to-consumer operations accounting for 90% of the total (Bark products are also sold at retailers nationwide, including at Target, Petco, PetSmart, and Costco Wholesale.
Gross profit was up an equally impressive 49% due to an increase in active subscriptions, which rose 41% to 1.95 million. However, customer churn increased to 7.4% from 6.2% a year ago, likely due to a post-pandemic reopening of retail stores, a situation that increased its customer acquisition costs some 60%.
The year-ago figure was actually depressed because of the COVID-19 outbreak, which made it exceptionally easy and cheap for internet retailers to acquire customers, but it helps explain why Bark's stock is down 44% year to date and over 58% from its 52 week high.
That makes The Original Bark Company a bargain. An estimated 63 million households own a dog, and Bark has penetrated just 1.9 million, giving it an enormous runway for growth.
With an increasing ability to leverage its expanding customer data assets to personalize its products toward individual pets, as well as introduce new innovative ways to tap into new households that have yet to try its service, Bark is only just beginning to unleash its potential.
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Eric Volkman has no position in any of the stocks mentioned. Keith Noonan owns shares of Take-Two Interactive. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale and Take-Two Interactive. The Motley Fool recommends the following options: long January 2023 $115 calls on Take-Two Interactive. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Last quarter total revenue rose 57% year over year to nearly $118 million with its direct-to-consumer operations accounting for 90% of the total (Bark products are also sold at retailers nationwide, including at Target, Petco, PetSmart, and Costco Wholesale. However, customer churn increased to 7.4% from 6.2% a year ago, likely due to a post-pandemic reopening of retail stores, a situation that increased its customer acquisition costs some 60%. The Motley Fool owns shares of and recommends Costco Wholesale and Take-Two Interactive. | Last quarter total revenue rose 57% year over year to nearly $118 million with its direct-to-consumer operations accounting for 90% of the total (Bark products are also sold at retailers nationwide, including at Target, Petco, PetSmart, and Costco Wholesale. However, customer churn increased to 7.4% from 6.2% a year ago, likely due to a post-pandemic reopening of retail stores, a situation that increased its customer acquisition costs some 60%. The Motley Fool owns shares of and recommends Costco Wholesale and Take-Two Interactive. | Last quarter total revenue rose 57% year over year to nearly $118 million with its direct-to-consumer operations accounting for 90% of the total (Bark products are also sold at retailers nationwide, including at Target, Petco, PetSmart, and Costco Wholesale. However, customer churn increased to 7.4% from 6.2% a year ago, likely due to a post-pandemic reopening of retail stores, a situation that increased its customer acquisition costs some 60%. The Motley Fool owns shares of and recommends Costco Wholesale and Take-Two Interactive. | Last quarter total revenue rose 57% year over year to nearly $118 million with its direct-to-consumer operations accounting for 90% of the total (Bark products are also sold at retailers nationwide, including at Target, Petco, PetSmart, and Costco Wholesale. However, customer churn increased to 7.4% from 6.2% a year ago, likely due to a post-pandemic reopening of retail stores, a situation that increased its customer acquisition costs some 60%. The Motley Fool owns shares of and recommends Costco Wholesale and Take-Two Interactive. | null |
14,028 | 626,222 | 2021-09-19 00:00:00 UTC | 3 Things to Watch in the Stock Market This Week | COST | https://www.nasdaq.com/articles/3-things-to-watch-in-the-stock-market-this-week-2021-09-19 | null | null | Stocks dropped for a second straight week last week, as both the Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) shed less than 1%. The decline still left investors looking at significant gains so far in 2021, with the Dow up 13% and the S&P 500 up 18%.
Earnings season continues with fresh earnings reports from several retailers over the next few trading days. Let's take a closer look at some highly anticipated announcements from this list, by Costco (NASDAQ: COST), Nike (NYSE: NKE), and Stitch Fix (NASDAQ: SFIX).
Image source: Getty Images.
Costco's renewal rate
Thanks to its monthly sales updates, investors already know that Costco had a great fiscal fourth quarter. Comparable-store sales jumped 9% in August, the warehouse giant reported in early September, which telegraphs good news in the upcoming earnings report on Thursday.
That announcement will add context around it fiscal 2021 performance, including an update on its profitability, which has been edging higher lately. But the big number to watch this week is Costco's renewal rate. Roughly 91% of its members have been renewing their subscriptions lately, reflecting solid engagement and industry-leading customer satisfaction.
Those wins support sales growth over time, but they also lay the foundation for rising membership fees. Costco hasn't raised its subscription prices in a few years, and Wall Street is hopeful that the next boost might come in fiscal 2022.
Nike's inventory
Rival Lululemon Athletica recently set the stage for what could be a strong earnings report out of Nike on Thursday. The athleisure specialist said it was enjoying accelerating sales growth and booming earnings as customers flocked toward innovative new product releases in the early summer.
Nike had a busy quarter for product launches, too, which is one reason most investors are looking for sales to rise in the low double-digit range this fiscal year, to roughly $50 billion, following last year's 19% spike.
Wall Street is even more excited about management's prediction of a new financial model that's more profitable thanks to direct-to-consumer sales. But the next portion of that race involves having Nike successfully raise prices to offset higher costs. Look for executives to discuss any supply chain challenges that might affect the holiday shopping season this week, too.
Stitch Fix's shipping update
It has been a wild ride for Stitch Fix shareholders this past year, and that volatility is likely to continue around its Tuesday earnings release.
On the downside, the apparel specialist might have been hit by a clogged supply chain and spiking transportation costs. Several industry peers have noted these challenges, and Stitch Fix's delivery model makes it more sensitive to shipping bottlenecks than its rivals are. Yet the business showed impressive resilience in the previous quarterly outing as CEO Elizabeth Spaulding took over for founder Katrina Lake.
Spaulding should spent some time highlighting Stitch Fix's new direct-buy offering that gives it a chance to play in a much bigger retailing space. That service went live nationally in August and has the potential to accelerate sales growth. But its more immediate concern is keeping inventory flowing smoothly through its system, at affordable prices, through a holiday shopping period that's likely to stress the freight delivery network over the next few months.
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Demitri Kalogeropoulos owns shares of Costco Wholesale and Nike. The Motley Fool owns shares of and recommends Costco Wholesale, Lululemon Athletica, Nike, and Stitch Fix. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Let's take a closer look at some highly anticipated announcements from this list, by Costco (NASDAQ: COST), Nike (NYSE: NKE), and Stitch Fix (NASDAQ: SFIX). Costco's renewal rate Thanks to its monthly sales updates, investors already know that Costco had a great fiscal fourth quarter. But the big number to watch this week is Costco's renewal rate. | Costco's renewal rate Thanks to its monthly sales updates, investors already know that Costco had a great fiscal fourth quarter. See the 10 stocks *Stock Advisor returns as of August 9, 2021 Demitri Kalogeropoulos owns shares of Costco Wholesale and Nike. The Motley Fool owns shares of and recommends Costco Wholesale, Lululemon Athletica, Nike, and Stitch Fix. | Costco's renewal rate Thanks to its monthly sales updates, investors already know that Costco had a great fiscal fourth quarter. See the 10 stocks *Stock Advisor returns as of August 9, 2021 Demitri Kalogeropoulos owns shares of Costco Wholesale and Nike. Let's take a closer look at some highly anticipated announcements from this list, by Costco (NASDAQ: COST), Nike (NYSE: NKE), and Stitch Fix (NASDAQ: SFIX). | Costco hasn't raised its subscription prices in a few years, and Wall Street is hopeful that the next boost might come in fiscal 2022. Let's take a closer look at some highly anticipated announcements from this list, by Costco (NASDAQ: COST), Nike (NYSE: NKE), and Stitch Fix (NASDAQ: SFIX). Costco's renewal rate Thanks to its monthly sales updates, investors already know that Costco had a great fiscal fourth quarter. | null |
14,029 | 626,223 | 2021-09-17 00:00:00 UTC | Kroger's Investor Presentation: 3 Takeaways | COST | https://www.nasdaq.com/articles/krogers-investor-presentation%3A-3-takeaways-2021-09-17 | null | null | Kroger (NYSE: KR) gave investors some good news in its latest earnings report. The supermarket giant raised its outlook for the second straight time in 2021 while proving its competitive strength against rivals like Walmart (NYSE: WMT). Sales, earnings, and cash flow metrics are all heading higher after shoppers spent freely on eat-at-home products through mid-August.
However, profits have been pressured by that market share battle, and Kroger still has a lot of ground to cover in its profitability gap compared to Walmart, Costco Wholesale, and others. In an investor presentation, CEO Rodney McMullen and his management team explained how they plan to catch up while boosting shareholder returns.
Image source: Kroger.
Let's look at three key highlights from that presentation.
1. Kroger isn't losing share
A key worry heading into the announcement was that Kroger was still losing market share to its main rival, Walmart. The retailing titan said in its last report that it was gaining customers in its fresh produce arena, after all.
CFC = Customer Fulfillment Centers. Image source: Kroger.
Kroger eased investors' concerns by posting a 14% two-year growth rate, which essentially matched Walmart's latest pace. Executives said the company's growth success was thanks to wins in areas like in-store brands, online ordering, and on-demand prepared meals.
2. Getting to 11% annual returns
Executives broke down what they see as the core investing thesis in the business, namely that earnings can grow by between 3% and 5% annually even as direct cash payments push total shareholder returns to roughly 11%. That formula relies on comparable-store sales growth that's modestly higher than the 2% boost investors saw in 2019, plus cost cuts.
Image source: Kroger.
Kroger is aiming to boost its core operating margin by 1 to 2 percentage points, which would put it closer to Costco and Walmart. But the grocery giant doesn't seem to have as much room here as peers like Target, which cover a wider range of niches including electronics and home furnishings. That's a major drawback in today's booming economy, but Kroger is hoping to reduce that disadvantage over time.
3. Raising the outlook
Management said that demand for food prepared at home and/or delivered to the home seems to be persisting even as consumers return to more normal mobility patterns. That positive trend is the main reason Kroger now expects sales to dip just 1% in 2021 after soaring last year. Earnings and free cash flow each received significant upgrades, too, although profit margin is being held back by pricing pressures. Kroger needs to keep its price hikes modest so that customer traffic stays healthy.
KPM = Kroger Precision Marketing. OP = Operating Profit. Image source: Kroger.
The stock's path from here might come down to its ability to move that margin number higher over time. Its rivals have paved the way, showing how profitability can jump with a more integrated digital selling channel and premium merchandise and delivery options. Kroger still hasn't demonstrated that it can succeed in the same way, though, and so Wall Street isn't fully buying into its growth thesis just yet.
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Demitri Kalogeropoulos owns shares of Costco Wholesale. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | However, profits have been pressured by that market share battle, and Kroger still has a lot of ground to cover in its profitability gap compared to Walmart, Costco Wholesale, and others. That formula relies on comparable-store sales growth that's modestly higher than the 2% boost investors saw in 2019, plus cost cuts. Kroger is aiming to boost its core operating margin by 1 to 2 percentage points, which would put it closer to Costco and Walmart. | That formula relies on comparable-store sales growth that's modestly higher than the 2% boost investors saw in 2019, plus cost cuts. See the 10 stocks *Stock Advisor returns as of August 9, 2021 Demitri Kalogeropoulos owns shares of Costco Wholesale. However, profits have been pressured by that market share battle, and Kroger still has a lot of ground to cover in its profitability gap compared to Walmart, Costco Wholesale, and others. | However, profits have been pressured by that market share battle, and Kroger still has a lot of ground to cover in its profitability gap compared to Walmart, Costco Wholesale, and others. That formula relies on comparable-store sales growth that's modestly higher than the 2% boost investors saw in 2019, plus cost cuts. Kroger is aiming to boost its core operating margin by 1 to 2 percentage points, which would put it closer to Costco and Walmart. | However, profits have been pressured by that market share battle, and Kroger still has a lot of ground to cover in its profitability gap compared to Walmart, Costco Wholesale, and others. That formula relies on comparable-store sales growth that's modestly higher than the 2% boost investors saw in 2019, plus cost cuts. Kroger is aiming to boost its core operating margin by 1 to 2 percentage points, which would put it closer to Costco and Walmart. | null |
14,030 | 626,224 | 2021-09-16 00:00:00 UTC | Sitting on Cash? These 2 Stocks Are Great Buys. | COST | https://www.nasdaq.com/articles/sitting-on-cash-these-2-stocks-are-great-buys.-2021-09-16 | null | null | If you're sitting on cash right now, you're probably only getting about 0.5% interest with an online savings account. If it's a stash of emergency cash, that's what you need to accept. Emergency savings aren't meant to grow.
But if it's investment money and you're just looking for what to buy in this frothy market, you can do better than a savings account. Trying to time the market and wait for a downturn to invest extra cash is counting on luck.
Instead, look at putting that cash into solid companies that pay decent dividends. Here are two that you can consider investing in now -- and even plan to build over time when the market does offer more of a discount.
Image source: Getty Images.
Costco treats its customers and shareholders well
Customers of Costco Wholesale (NASDAQ: COST) love to shop at the warehouse retailer. The company has 110 million membership cardholders and a 91% renewal rate in the U.S. and Canada. Costco rewards that customer loyalty with great selections and pricing. And management has that same mentality with employees and shareholders.
The company was one of the most proactive retailers in raising its starting employee wage to $15 per hour in 2019 -- and it bumped that up to $16 earlier this year. For shareholders, the company pays a modest dividend, but has also rewarded owners with a special dividend four times in the past eight years. That included a $10 per share payout in December 2020 funded by existing cash.
That signal of confidence seems justified with the company reporting almost 18% sales growth in this fiscal year's first three quarters, ended May 9, compared to the prior-year period. That's the kind of increase investors usually see in growth sectors rather than a consumer staples name like Costco.
The only problem: The stock has also reacted more like a growth name with shares more than tripling over the past five years -- and 37% in just the past 12 months. With those gains, the base dividend now only yields 0.64% at the recent share price. But that's still higher than a typical savings account.
It's also an investment in a proven company with a solid outlook and the history of special dividends. It makes sense to take an initial position today using investable cash -- with plans to build a larger holding when the market next offers a discount.
Image source: Getty Images.
NextEra Energy is a utility with a growth arm
Another stock with returns that have outpaced what is typically expected from its sector is NextEra Energy (NYSE: NEE). It might come as a surprise that the largest electric utility in the United States is also a high-flying stock.
NextEra is the parent company of Florida Power & Light as well as Gulf Power. But it also has a renewable energy subsidiary that is growing quickly. The company gives investors returns on cash with a steady (and growing) dividend as well as the opportunity to be invested in the renewables sector.
As a result, NextEra's earnings and dividends haven't been very utility-like. Since 2005, the company's adjusted earnings per share have grown at an annual rate of almost 9% and its dividend payout has risen at an annual rate of 9.6%. NextEra says it expects to continue raising its dividend by about 10% annually at least through 2022. The company also believes it will deliver EPS growth from 2021 levels at the high end of its 6% to 8% targeted range through 2023.
While the dividend yield is less than that of many utilities at a recent 1.8%, it's well above what cash in savings accounts will currently return. And the investment brings potential growth with subsidiary NextEra Energy Resources, which invests in renewable energy capacity generation. NextEra says its vision is to be the world's largest, most profitable provider of clean energy.
As with Costco, investors have already bid up shares in NextEra Energy. But that doesn't make it a bad place to put some cash right now while you plan to add to the investment at a better valuation in the future.
10 stocks we like better than Costco Wholesale
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Costco Wholesale wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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Howard Smith owns shares of NextEra Energy. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool recommends NextEra Energy. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Costco treats its customers and shareholders well Customers of Costco Wholesale (NASDAQ: COST) love to shop at the warehouse retailer. Costco rewards that customer loyalty with great selections and pricing. That's the kind of increase investors usually see in growth sectors rather than a consumer staples name like Costco. | The Motley Fool owns shares of and recommends Costco Wholesale. Costco treats its customers and shareholders well Customers of Costco Wholesale (NASDAQ: COST) love to shop at the warehouse retailer. Costco rewards that customer loyalty with great selections and pricing. | Costco treats its customers and shareholders well Customers of Costco Wholesale (NASDAQ: COST) love to shop at the warehouse retailer. Costco rewards that customer loyalty with great selections and pricing. That's the kind of increase investors usually see in growth sectors rather than a consumer staples name like Costco. | Costco treats its customers and shareholders well Customers of Costco Wholesale (NASDAQ: COST) love to shop at the warehouse retailer. Costco rewards that customer loyalty with great selections and pricing. That's the kind of increase investors usually see in growth sectors rather than a consumer staples name like Costco. | null |
14,031 | 626,226 | 2021-09-15 00:00:00 UTC | Costco Wholesale Reports After the Close on 9/23 -- Options Contracts Expire the Next Day | COST | https://www.nasdaq.com/articles/costco-wholesale-reports-after-the-close-on-9-23-options-contracts-expire-the-next-day | null | null | According to NextEarningsDate.com, the Costco Wholesale (NASD: COST) COST next earnings date is projected to be 9/23 after the close, with earnings estimates of $3.55/share on $61.23 Billion of revenue. Looking back, the recent Costco Wholesale earnings history looks like this:
PERIOD EARNINGS DATE EARNINGS
Q3 2021 5/27/2021 2.750
Q2 2021 3/4/2021 2.140
Q1 2021 12/10/2020 2.290
Q4 2020 9/24/2020 3.130
Q3 2020 5/28/2020 1.890
The company has an impressive long-term earnings per share chart:
And with quarterly revenue that looks like this:
But earnings reports can often uniquely bring abrupt volatility to a stock, in either direction, as investors digest the fundamental details. And that volatility can be a stock options trader's dream come true — so such traders will be interested to know that Costco Wholesale has options available that expire September 24th.
Visit StockOptionsChannel.com to investigate the COST options chain on either the puts side or the call side, for further ideas.
Costco Wholesale's current dividend yield is 0.69%, with the following Costco Wholesale Dividend History. Also, dividend investors should check out the following ideas for Top Dividends and Monthly Dividend Paying Stocks.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking back, the recent Costco Wholesale earnings history looks like this: And that volatility can be a stock options trader's dream come true — so such traders will be interested to know that Costco Wholesale has options available that expire September 24th. According to NextEarningsDate.com, the Costco Wholesale (NASD: COST) COST next earnings date is projected to be 9/23 after the close, with earnings estimates of $3.55/share on $61.23 Billion of revenue. | According to NextEarningsDate.com, the Costco Wholesale (NASD: COST) COST next earnings date is projected to be 9/23 after the close, with earnings estimates of $3.55/share on $61.23 Billion of revenue. Looking back, the recent Costco Wholesale earnings history looks like this: Costco Wholesale's current dividend yield is 0.69%, with the following Costco Wholesale Dividend History. | According to NextEarningsDate.com, the Costco Wholesale (NASD: COST) COST next earnings date is projected to be 9/23 after the close, with earnings estimates of $3.55/share on $61.23 Billion of revenue. And that volatility can be a stock options trader's dream come true — so such traders will be interested to know that Costco Wholesale has options available that expire September 24th. Costco Wholesale's current dividend yield is 0.69%, with the following Costco Wholesale Dividend History. | According to NextEarningsDate.com, the Costco Wholesale (NASD: COST) COST next earnings date is projected to be 9/23 after the close, with earnings estimates of $3.55/share on $61.23 Billion of revenue. Looking back, the recent Costco Wholesale earnings history looks like this: Costco Wholesale's current dividend yield is 0.69%, with the following Costco Wholesale Dividend History. | null |
14,032 | 626,227 | 2021-09-14 00:00:00 UTC | Where and How to Buy GE Stock as the Bears Roam | COST | https://www.nasdaq.com/articles/where-and-how-to-buy-ge-stock-as-the-bears-roam-2021-09-14 | null | null | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
General Electric (NYSE:GE). The wind is no longer at its back. And there’s been plenty of excuses proffered for the weakness. Yet for tomorrow’s investors and away from a bearish storyline, GE stock looks increasingly ready to bring good things to life once more. Let me explain.
Source: Carsten Reisinger / Shutterstock.com
It’s up 21% in 2021. I’m referring to former Dow Jones Industrials blue-chip and conglomerate GE. And it’s handily beating the broader benchmark’s own solid return of about 14%.
But as a turnaround story that’s rarely mentioned in the same breath as Apple (NASDAQ:AAPL), Costco (NASDAQ:COST), Chevron (NYSE:CVX) and other former blue-chip constituents, GE has maybe unsurprisingly taken its own route to get there.
Let’s Look at GE Stock
While the Dow and other blue-chips have only recently captured this year’s largest bounties to date, GE’s outperformance was put in place back in March following a rally of more than 100% over the span of five months.
Yet before investors worry a rotation into cyclicals that’s made GE look like an orphaned stock unfit for widows and warns of something more ominous, I’m here to say, “relax.”
7 Stocks to Buy if the Market Crashes in September
The thing is all stocks correct. And it’s common for pressure to occur following a larger rally in shares such as GE’s.
As well and more often than we’d like to believe, the stories behind a stock’s behavior may sound and look like solid anecdotal evidence, but they rarely pan out as prophesized.
One only needs to consider Warren Buffett’s “the world has changed” airliner warning amid the height of last year’s pandemic-related panic to realize even the best are prone to errant forecasts.
A Choice to Make
Having said that there’s a choice to make when it comes to deciding how to treat GE stock.
The more popular choice right now is to fear a bearish narrative warning Covid’s delta variant will undermine commercial travel and in turn, negatively impact GE’s most important earnings and cash flow generator – it’s aviation business.
Likewise, fretting over GE’s wind turbine investments is also popular cooler talk.
At the moment there’s an undesirable combination of rising material costs and waning installation growth taking over the conversation. And some fear the situation could persist for the next few years based on disappointing outlooks from turbine competitors Siemens Gamesa (OTCMKTS:GCTAF) and Vestas Wind Systems (OTCMKTS:VWDRY).
That’s the stock market, though. It’s always made up of bears and bulls. And right now the former have the mic in General Electric.
But for those that can visualize the long-game of GE stock’s turnaround, today’s price chart is agreeable as a forward-looking pricing mechanism capable of bringing good things to life for its investors and no matter other warnings.
GE Stock Monthly Price Chart
Source: Charts by TradingView
After six months of consolidation work, GE stock has put together a solid technical platform for a pattern breakout to fresh relative highs.
As the monthly chart of GE shows, a bullish “high handle” formed against the stock’s 38% retracement level has found support around the mid-pivot of a bottoming and bullish W pattern.
A reaction in shares above the contraction’s high of $115.23 in conjunction with a bullish stochastics crossover should reasonably find GE stock rallying towards $140 to $160 and a challenge of the 50% to 62% Fibonacci zone.
Should the handle’s current low from two weeks ago continue holding and stochastics signals a crossover prior to a breakout in shares, I’d be agreeable with a lower-priced purchase in GE alongside a stop-loss beneath the pattern bottom of $94.56.
Bottom line, either or the any number of other ways investors lean on stocks for buying decisions, I’d also turn to the options market rather than buying GE shares.
One favored strategy is a December or January bull call vertical on GE stock that’s modestly out-of-the-money. This type of spread vastly reduces downside exposure relative to owning shares, while using the power of leverage for realistic and superior returns to bring even better things to life for investors.
On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.
The post Where and How to Buy GE Stock as the Bears Roam appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | But as a turnaround story that’s rarely mentioned in the same breath as Apple (NASDAQ:AAPL), Costco (NASDAQ:COST), Chevron (NYSE:CVX) and other former blue-chip constituents, GE has maybe unsurprisingly taken its own route to get there. At the moment there’s an undesirable combination of rising material costs and waning installation growth taking over the conversation. The more popular choice right now is to fear a bearish narrative warning Covid’s delta variant will undermine commercial travel and in turn, negatively impact GE’s most important earnings and cash flow generator – it’s aviation business. | But as a turnaround story that’s rarely mentioned in the same breath as Apple (NASDAQ:AAPL), Costco (NASDAQ:COST), Chevron (NYSE:CVX) and other former blue-chip constituents, GE has maybe unsurprisingly taken its own route to get there. At the moment there’s an undesirable combination of rising material costs and waning installation growth taking over the conversation. InvestorPlace - Stock Market News, Stock Advice & Trading Tips General Electric (NYSE:GE). | But as a turnaround story that’s rarely mentioned in the same breath as Apple (NASDAQ:AAPL), Costco (NASDAQ:COST), Chevron (NYSE:CVX) and other former blue-chip constituents, GE has maybe unsurprisingly taken its own route to get there. At the moment there’s an undesirable combination of rising material costs and waning installation growth taking over the conversation. InvestorPlace - Stock Market News, Stock Advice & Trading Tips General Electric (NYSE:GE). | But as a turnaround story that’s rarely mentioned in the same breath as Apple (NASDAQ:AAPL), Costco (NASDAQ:COST), Chevron (NYSE:CVX) and other former blue-chip constituents, GE has maybe unsurprisingly taken its own route to get there. At the moment there’s an undesirable combination of rising material costs and waning installation growth taking over the conversation. Let’s Look at GE Stock While the Dow and other blue-chips have only recently captured this year’s largest bounties to date, GE’s outperformance was put in place back in March following a rally of more than 100% over the span of five months. | null |
14,033 | 626,229 | 2021-09-13 00:00:00 UTC | QQQ, CMCSA, NFLX, COST: ETF Outflow Alert | COST | https://www.nasdaq.com/articles/qqq-cmcsa-nflx-cost%3A-etf-outflow-alert-2021-09-13 | null | null | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco QQQ (Symbol: QQQ) where we have detected an approximate $376.6 million dollar outflow -- that's a 0.2% decrease week over week (from 512,250,000 to 511,250,000). Among the largest underlying components of QQQ, in trading today Comcast Corp (Symbol: CMCSA) is up about 2%, Netflix Inc (Symbol: NFLX) is down about 2.1%, and Costco Wholesale Corp (Symbol: COST) is lower by about 0.4%. For a complete list of holdings, visit the QQQ Holdings page » The chart below shows the one year price performance of QQQ, versus its 200 day moving average:
Looking at the chart above, QQQ's low point in its 52 week range is $260.11 per share, with $382.778 as the 52 week high point — that compares with a last trade of $375.27. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs experienced notable outflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of QQQ, in trading today Comcast Corp (Symbol: CMCSA) is up about 2%, Netflix Inc (Symbol: NFLX) is down about 2.1%, and Costco Wholesale Corp (Symbol: COST) is lower by about 0.4%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco QQQ (Symbol: QQQ) where we have detected an approximate $376.6 million dollar outflow -- that's a 0.2% decrease week over week (from 512,250,000 to 511,250,000). These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | Among the largest underlying components of QQQ, in trading today Comcast Corp (Symbol: CMCSA) is up about 2%, Netflix Inc (Symbol: NFLX) is down about 2.1%, and Costco Wholesale Corp (Symbol: COST) is lower by about 0.4%. For a complete list of holdings, visit the QQQ Holdings page » The chart below shows the one year price performance of QQQ, versus its 200 day moving average: Looking at the chart above, QQQ's low point in its 52 week range is $260.11 per share, with $382.778 as the 52 week high point — that compares with a last trade of $375.27. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). | Among the largest underlying components of QQQ, in trading today Comcast Corp (Symbol: CMCSA) is up about 2%, Netflix Inc (Symbol: NFLX) is down about 2.1%, and Costco Wholesale Corp (Symbol: COST) is lower by about 0.4%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco QQQ (Symbol: QQQ) where we have detected an approximate $376.6 million dollar outflow -- that's a 0.2% decrease week over week (from 512,250,000 to 511,250,000). For a complete list of holdings, visit the QQQ Holdings page » The chart below shows the one year price performance of QQQ, versus its 200 day moving average: Looking at the chart above, QQQ's low point in its 52 week range is $260.11 per share, with $382.778 as the 52 week high point — that compares with a last trade of $375.27. | Among the largest underlying components of QQQ, in trading today Comcast Corp (Symbol: CMCSA) is up about 2%, Netflix Inc (Symbol: NFLX) is down about 2.1%, and Costco Wholesale Corp (Symbol: COST) is lower by about 0.4%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco QQQ (Symbol: QQQ) where we have detected an approximate $376.6 million dollar outflow -- that's a 0.2% decrease week over week (from 512,250,000 to 511,250,000). For a complete list of holdings, visit the QQQ Holdings page » The chart below shows the one year price performance of QQQ, versus its 200 day moving average: Looking at the chart above, QQQ's low point in its 52 week range is $260.11 per share, with $382.778 as the 52 week high point — that compares with a last trade of $375.27. | null |
14,034 | 626,231 | 2021-09-11 00:00:00 UTC | 3 Recession-Ready Stocks to Buy in September | COST | https://www.nasdaq.com/articles/3-recession-ready-stocks-to-buy-in-september-2021-09-11 | null | null | Recent headlines might make you worried that a recession is coming, but you shouldn't freak out. If the coronavirus stays under control, the economy should continue moving toward recovery.
However, it would be silly to ignore potential risks to your investment portfolio. These three stocks have demonstrated their ability to navigate tough times and should be strong performers even if the economy starts to stagnate.
1. Costco Wholesale
Costco Wholesale (NASDAQ: COST) has proven itself through multiple recessions, and every indication is that it will navigate the next one efficiently. The chain carries a broad range of consumer staples at attractive price points, especially on items sold in bulk.
When consumer wallets tighten, people are less likely to cut the sorts of goods carried by Costco. Moreover, some households will actually increase their spending at Costco as they become more price conscious, substituting away from more expensive alternatives.
Image source: Getty Images.
Costco's club membership structure is also a central piece of the story. To shop at the warehouse store, you have to be a member, which requires an annual fee. Membership fees help to stabilize cash flows because they represent nearly 70% of operating income.
Even more importantly, the membership structure provides an important metric for tracking growth and customer retention. In recent years, membership renewal rates have been around 90%. This underlines the value that customers perceive from Costco, and it is a helpful metric to track competitive standing.
Costco's excellent financial health also provides security for investors. In the event of an economic downturn hurting the retailer's performance, it has ample cash flows and cash on hand to meet its financial obligations.
The most obvious risk to Costco at this point is a fairly aggressive valuation. The stock's forward price-to-earnings ratio is 40, and forward enterprise value-to-EBITDA ratio is 24.8. These are high relative to Costco's peers and its own historical levels. That creates additional risk in the event of a bear market, since there's more room for prices to fall.
2. Pfizer
Pfizer (NYSE: PFE) is a pharmaceutical company that makes the list for two big reasons.
First, healthcare and pharmaceutical stocks are often considered defensive because they usually don't suffer as much during recessions. Some medical care isn't elective, and pharma companies derive substantial revenue from public programs and private insurers. They aren't impacted as much when consumers stop spending.
The second reason is that ongoing coronavirus outbreaks are the most likely cause of a recession right now. As one of the leaders in COVID-19 vaccines, Pfizer is actually in a position to reap temporary financial benefits from people around the world seeking inoculation from the virus and its variants.
More than 40% of the company's revenue was attributed to the vaccine in the most recent quarter. If there is a recession, this is a company that has a lifeline.
Pfizer maintains a large portfolio of popular drugs, and its pipeline includes several more potential blockbusters at various stages of development and clinical trials. The company will continue to produce results for investors for years to come.
It's also a consistent dividend-paying stock that currently has an attractive 3.3% yield. Pfizer stock isn't immune to the market-wide swings that might be coming, but there's plenty here to get you through lean times.
3. Amazon
Amazon (NASDAQ: AMZN) might seem like an odd addition to this list, as a retail stock that could be influenced by cyclicality. However, the company has diversified its revenue and proven through multiple recessions that it can continue growing through recessions.
Amazon has now experienced two significant recessions over the past 15 years, and it kept chugging along in both cases. Moreover, it actually gained more market share in 2020 as e-commerce grew as a percentage of total share. If we have another lockdown-induced recession, I would expect more of the same.
Data by YCharts
Amazon Web Services, the company's cloud computing segment, also generated 12% of total sales for the full year 2020. Even if consumer sentiment weakens or Amazon loses market share to other retailers, the company is still a dominant force in cloud computing, an industry that is set for growth for years to come.
It has also stepped into the media content game in a big way with Prime Video, which had 175 million people stream video in 2020.
It's hard to disrupt any of Amazon's different business operations, and something truly catastrophic would have to happen to hurt all of them. This stock can provide both stability and growth through a potential upcoming recession.
Instead of panicking and selling your investments, you should calmly build a portfolio that can perform during a recession or a bull market.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Ryan Downie owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and Costco Wholesale. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Costco Wholesale Costco Wholesale (NASDAQ: COST) has proven itself through multiple recessions, and every indication is that it will navigate the next one efficiently. When consumer wallets tighten, people are less likely to cut the sorts of goods carried by Costco. Moreover, some households will actually increase their spending at Costco as they become more price conscious, substituting away from more expensive alternatives. | Costco Wholesale Costco Wholesale (NASDAQ: COST) has proven itself through multiple recessions, and every indication is that it will navigate the next one efficiently. The Motley Fool owns shares of and recommends Amazon and Costco Wholesale. When consumer wallets tighten, people are less likely to cut the sorts of goods carried by Costco. | Costco Wholesale Costco Wholesale (NASDAQ: COST) has proven itself through multiple recessions, and every indication is that it will navigate the next one efficiently. When consumer wallets tighten, people are less likely to cut the sorts of goods carried by Costco. Moreover, some households will actually increase their spending at Costco as they become more price conscious, substituting away from more expensive alternatives. | Costco Wholesale Costco Wholesale (NASDAQ: COST) has proven itself through multiple recessions, and every indication is that it will navigate the next one efficiently. When consumer wallets tighten, people are less likely to cut the sorts of goods carried by Costco. Moreover, some households will actually increase their spending at Costco as they become more price conscious, substituting away from more expensive alternatives. | null |
14,035 | 626,232 | 2021-09-10 00:00:00 UTC | Should You Buy Costco Stock Ahead of Earnings? | COST | https://www.nasdaq.com/articles/should-you-buy-costco-stock-ahead-of-earnings-2021-09-10 | null | null | Warehouse club giant Costco Wholesale (NASDAQ: COST) is set to report fourth-quarter and fiscal 2021 yearly earnings on Sept. 23. The company is continuing the momentum that began at the pandemic's onset, growing year-over-year sales. That's despite tough comparisons from the year prior when consumers had fewer options for where they could spend their time and money.
Costco's philosophy of delivering exceptional value to customers is attracting new customers and keeping existing ones. That being said, Costco's strong operating performance and prospects are getting noticed. The stock price is up over 22% in 2021.
Let's look at why the market is adding Costco to its shopping cart and if you should buy the stock ahead of earnings.
Image source: Getty Images.
Costco is making the most of what its customers value
Although the stock has more than rebounded, it did experience a pronounced drop from Thanksgiving 2020 to early March 2021, just as the economy showed solid signs of reopening and vaccines for the coronavirus were approved. Some investors worried that consumers who relied on Costco during the pandemic might finally have other options for their spending money. But that hasn't really been the case so far. While sales growth did decelerate from the surging levels during lockdowns, the growth rate is still above pre-pandemic rates.
This can be attributed, in part, to Costco's management's skill at acquiring merchandise consumers want. Supply chain bottlenecks are causing shortages and increasing prices at many competing retailers. But Costco is bucking the trend with its seemingly always-stocked shelves and comparatively better prices.
Costco requires a membership to shop at its warehouse stores and it managed to add 4.8 million members to its now total of 60.6 million in the last year. Members pay a fee of either $60 or $120 annually for the basic or executive membership, respectively. The value it provides to those households is demonstrated by the 91% membership renewal rate it maintains in North America. Unlike other businesses that experienced surging revenue at the pandemic's onset, Costco is likely to retain a large part of the customers it attracted for several years.
The one caveat with Costco as a business is that it operates on skinny profit margins. Costco's operating profit margin averaged 3.1% in the last decade. That's a spread that leaves little room for error. Admittedly, Costco has not needed any room for error, given its excellent execution. The margin has been enough to grow earnings per share at a compounded annual growth rate of 11.9%.
What this could mean for investors
Analysts on Wall Street expect Costco to report revenue of $61.2 billion and earnings per share of $3.53 in the fourth quarter. If the company reports revenue as estimated, which is likely, considering Costco provides monthly sales reports, it would be a 14.7% increase from the year prior. The earnings per share figure would be 16% higher.
The rise in Costco's stock price has it trading at a price-to-earnings ratio of 43.74, the highest it has traded for in almost 20 years. The relatively high price means potential investors don't need to rush out and buy the stock ahead of earnings. You have the luxury of waiting for results to come out, digesting the new information, and deciding after evaluation.
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Parkev Tatevosian has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Costco is making the most of what its customers value Although the stock has more than rebounded, it did experience a pronounced drop from Thanksgiving 2020 to early March 2021, just as the economy showed solid signs of reopening and vaccines for the coronavirus were approved. Unlike other businesses that experienced surging revenue at the pandemic's onset, Costco is likely to retain a large part of the customers it attracted for several years. What this could mean for investors Analysts on Wall Street expect Costco to report revenue of $61.2 billion and earnings per share of $3.53 in the fourth quarter. | Unlike other businesses that experienced surging revenue at the pandemic's onset, Costco is likely to retain a large part of the customers it attracted for several years. Costco's operating profit margin averaged 3.1% in the last decade. Warehouse club giant Costco Wholesale (NASDAQ: COST) is set to report fourth-quarter and fiscal 2021 yearly earnings on Sept. 23. | Let's look at why the market is adding Costco to its shopping cart and if you should buy the stock ahead of earnings. 10 stocks we like better than Costco Wholesale When our award-winning analyst team has a stock tip, it can pay to listen. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Costco Wholesale wasn't one of them! | Unlike other businesses that experienced surging revenue at the pandemic's onset, Costco is likely to retain a large part of the customers it attracted for several years. Warehouse club giant Costco Wholesale (NASDAQ: COST) is set to report fourth-quarter and fiscal 2021 yearly earnings on Sept. 23. Costco's philosophy of delivering exceptional value to customers is attracting new customers and keeping existing ones. | null |
14,036 | 626,233 | 2021-09-09 00:00:00 UTC | How Buying This Stock In Bulk Could Pay Off In 20 Years | COST | https://www.nasdaq.com/articles/how-buying-this-stock-in-bulk-could-pay-off-in-20-years-2021-09-09 | null | null | Since 1983, warehouse retailer Costco (NASDAQ: COST) has sold consumer goods in bulk, giving its customers deals at a fraction of the price of competitors like Walmart (NYSE: WMT) -- a business model that has paid off for customers and shareholders alike. Costco's growing base of customers still value its low costs, and they are willing to pay a recurring membership to get these deals -- giving Costco and its shareholders a tremendous opportunity to benefit from those fees' consistent increases in the years to come.
Savings galore
Costco sells items in bulk to provide consumers with quality goods for the cheapest prices. But while this lets customers buy everything from socks to candy bars at a lower per-item cost, passing along these savings also gives Costco relatively low gross margins of 11.2%. In contrast, Walmart's gross margin has hovered around 25% since early 2020. Even with membership fees counted in, Costco's gross margin only approaches 13%. The same slim margins that help Costco attract customers leave its business less resilient financially.
Image source: Getty Images.
To recoup those low margins, Costco has customers pay a yearly subscription fee -- $60 in the U.S., or $120 for Executive Membership (which gives customers an annual rebate equalling 2% of what they've spent). This is where Costco earns nearly all of its income. Its customers are amazingly loyal to the business, with 88% worldwide renewal rates.Membership revenue has grown more than 10% year over year to $901 million in the most recent quarter of 2021, despite the COVID pandemic.
Membership growth drove 45% year-over-year net income gains in the most recent quarter, to $1.2 billion, alongside trailing-12-month operating income of $6.9 billion. Since 2019, operating income as a percentage of revenue has hovered around an average of 3.3% of revenue, suggesting that rising revenue and expenses have roughly kept pace with each other.
Continual pricing power
Costco has slowly increased subscription fees for many years, most recently in 2017, with $5 and $10 respective hikes for each U.S. membership tier. Renewal rates now are even higher than they were in 2017 -- suggesting that once again, Costco could increase its prices soon.
If the company were to increase its membership prices, almost all of the extra money would fall straight to its bottom line. If the company charged another $5 for each membership, or its equivalent for fees in other countries -- an 8% increase -- it could add roughly $300 million a year to the company's $3.75 billion in trailing 12-month membership revenue.
As it has in the past, Costco could pass some of this extra cash on to shareholders. Since 2015, Costco has nearly doubled its dividend, from $0.40 a quarter to $0.80. And that's not counting any of its periodic special dividends, which it most recently paid in late 2020.
Dedicated management
Craig Jelinek, the company's CEO, has a rating of 4.1 stars out of 5 on Glassdoor and 90% approval ratings. This is remarkably strong for a retailer, especially when compared to Walmart's CEO, Doug McMillon, who only has 66% approval and 3.3 stars. Before becoming CEO in 2012, Jelinek worked for Costco for 26 years at holding various positions.
Jelinek and the rest of the management team have been methodical when opening new stores, making sure they only get the best real estate. The company has only opened 16 new or relocated locations worldwide since the start of 2021, and it plans to open only five more for the rest of the year. This tactic has proved to be working. Compared to Walmart, Costco closes relatively few stores. Currently, Walmart has 58 fewer stores now than it did at the end of the year, whereas Costco has not closed any.
This growth, however, could end up being a double-edged sword, as Costco's deliberate store additions could give competitors a wider opportunity to establish themselves and grow their footprint faster than Costco.
Investors should watch Costco's membership growth, and how the company flexes its pricing power. If Costco can grow memberships while increasing what members pay for that privilege, the business and its shareholders could continue to prosper for many years.
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Jamie Louko owns shares of Costco Wholesale. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Savings galore Costco sells items in bulk to provide consumers with quality goods for the cheapest prices. But while this lets customers buy everything from socks to candy bars at a lower per-item cost, passing along these savings also gives Costco relatively low gross margins of 11.2%. Continual pricing power Costco has slowly increased subscription fees for many years, most recently in 2017, with $5 and $10 respective hikes for each U.S. membership tier. | Since 1983, warehouse retailer Costco (NASDAQ: COST) has sold consumer goods in bulk, giving its customers deals at a fraction of the price of competitors like Walmart (NYSE: WMT) -- a business model that has paid off for customers and shareholders alike. To recoup those low margins, Costco has customers pay a yearly subscription fee -- $60 in the U.S., or $120 for Executive Membership (which gives customers an annual rebate equalling 2% of what they've spent). Continual pricing power Costco has slowly increased subscription fees for many years, most recently in 2017, with $5 and $10 respective hikes for each U.S. membership tier. | Since 1983, warehouse retailer Costco (NASDAQ: COST) has sold consumer goods in bulk, giving its customers deals at a fraction of the price of competitors like Walmart (NYSE: WMT) -- a business model that has paid off for customers and shareholders alike. Costco's growing base of customers still value its low costs, and they are willing to pay a recurring membership to get these deals -- giving Costco and its shareholders a tremendous opportunity to benefit from those fees' consistent increases in the years to come. To recoup those low margins, Costco has customers pay a yearly subscription fee -- $60 in the U.S., or $120 for Executive Membership (which gives customers an annual rebate equalling 2% of what they've spent). | Costco's growing base of customers still value its low costs, and they are willing to pay a recurring membership to get these deals -- giving Costco and its shareholders a tremendous opportunity to benefit from those fees' consistent increases in the years to come. Since 1983, warehouse retailer Costco (NASDAQ: COST) has sold consumer goods in bulk, giving its customers deals at a fraction of the price of competitors like Walmart (NYSE: WMT) -- a business model that has paid off for customers and shareholders alike. Savings galore Costco sells items in bulk to provide consumers with quality goods for the cheapest prices. | null |
14,037 | 626,234 | 2021-09-07 00:00:00 UTC | Notable Tuesday Option Activity: LRCX, MMM, COST | COST | https://www.nasdaq.com/articles/notable-tuesday-option-activity%3A-lrcx-mmm-cost-2021-09-07 | null | null | Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Lam Research Corp (Symbol: LRCX), where a total volume of 13,374 contracts has been traded thus far today, a contract volume which is representative of approximately 1.3 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 107.5% of LRCX's average daily trading volume over the past month, of 1.2 million shares. Especially high volume was seen for the $540 strike put option expiring November 19, 2021, with 1,865 contracts trading so far today, representing approximately 186,500 underlying shares of LRCX. Below is a chart showing LRCX's trailing twelve month trading history, with the $540 strike highlighted in orange:
3M Co (Symbol: MMM) options are showing a volume of 18,745 contracts thus far today. That number of contracts represents approximately 1.9 million underlying shares, working out to a sizeable 101.3% of MMM's average daily trading volume over the past month, of 1.9 million shares. Particularly high volume was seen for the $175 strike put option expiring October 01, 2021, with 1,042 contracts trading so far today, representing approximately 104,200 underlying shares of MMM. Below is a chart showing MMM's trailing twelve month trading history, with the $175 strike highlighted in orange:
And Costco Wholesale Corp (Symbol: COST) saw options trading volume of 15,961 contracts, representing approximately 1.6 million underlying shares or approximately 99.3% of COST's average daily trading volume over the past month, of 1.6 million shares. Particularly high volume was seen for the $440 strike put option expiring October 15, 2021, with 1,887 contracts trading so far today, representing approximately 188,700 underlying shares of COST. Below is a chart showing COST's trailing twelve month trading history, with the $440 strike highlighted in orange:
For the various different available expirations for LRCX options, MMM options, or COST options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Particularly high volume was seen for the $440 strike put option expiring October 15, 2021, with 1,887 contracts trading so far today, representing approximately 188,700 underlying shares of COST. Below is a chart showing MMM's trailing twelve month trading history, with the $175 strike highlighted in orange: And Costco Wholesale Corp (Symbol: COST) saw options trading volume of 15,961 contracts, representing approximately 1.6 million underlying shares or approximately 99.3% of COST's average daily trading volume over the past month, of 1.6 million shares. Below is a chart showing COST's trailing twelve month trading history, with the $440 strike highlighted in orange: For the various different available expirations for LRCX options, MMM options, or COST options, visit StockOptionsChannel.com. | Below is a chart showing MMM's trailing twelve month trading history, with the $175 strike highlighted in orange: And Costco Wholesale Corp (Symbol: COST) saw options trading volume of 15,961 contracts, representing approximately 1.6 million underlying shares or approximately 99.3% of COST's average daily trading volume over the past month, of 1.6 million shares. Particularly high volume was seen for the $440 strike put option expiring October 15, 2021, with 1,887 contracts trading so far today, representing approximately 188,700 underlying shares of COST. Below is a chart showing COST's trailing twelve month trading history, with the $440 strike highlighted in orange: For the various different available expirations for LRCX options, MMM options, or COST options, visit StockOptionsChannel.com. | Below is a chart showing MMM's trailing twelve month trading history, with the $175 strike highlighted in orange: And Costco Wholesale Corp (Symbol: COST) saw options trading volume of 15,961 contracts, representing approximately 1.6 million underlying shares or approximately 99.3% of COST's average daily trading volume over the past month, of 1.6 million shares. Particularly high volume was seen for the $440 strike put option expiring October 15, 2021, with 1,887 contracts trading so far today, representing approximately 188,700 underlying shares of COST. Below is a chart showing COST's trailing twelve month trading history, with the $440 strike highlighted in orange: For the various different available expirations for LRCX options, MMM options, or COST options, visit StockOptionsChannel.com. | Below is a chart showing MMM's trailing twelve month trading history, with the $175 strike highlighted in orange: And Costco Wholesale Corp (Symbol: COST) saw options trading volume of 15,961 contracts, representing approximately 1.6 million underlying shares or approximately 99.3% of COST's average daily trading volume over the past month, of 1.6 million shares. Below is a chart showing COST's trailing twelve month trading history, with the $440 strike highlighted in orange: For the various different available expirations for LRCX options, MMM options, or COST options, visit StockOptionsChannel.com. Particularly high volume was seen for the $440 strike put option expiring October 15, 2021, with 1,887 contracts trading so far today, representing approximately 188,700 underlying shares of COST. | null |
14,038 | 626,236 | 2021-09-03 00:00:00 UTC | Costco Stock Hits New All-Time High After Strong August Sales Report | COST | https://www.nasdaq.com/articles/costco-stock-hits-new-all-time-high-after-strong-august-sales-report-2021-09-03 | null | null | During the first six months of the COVID-19 pandemic, consumers flocked to Costco Wholesale (NASDAQ: COST). Costco members clearly valued the ability to buy a wide range of food, household essentials, and discretionary items at great prices in a single stop.
Many investors questioned whether the uptick in Costco's sales growth last year was sustainable. Yet despite facing increasingly tough comparisons, Costco has announced a string of phenomenal sales results this year. That streak continued this week, as the warehouse club giant reported incredible sales growth for August, the final month of its 2021 fiscal year.
Sales momentum accelerates a bit
Costco's adjusted comparable sales (excluding the impact of gasoline price inflation and currency fluctuations) rose 8% in July. That was an impressive result, coming on top of 15.8% adjusted comp sales growth a year earlier.
The retail giant posted even stronger growth in August, as adjusted comp sales increased 9.1%, despite another tough year-over-year comparison. Comp sales rose 10.1% in the U.S. -- Costco's most mature market -- outpacing the company average.
Interestingly, e-commerce comp sales inched up just 1.8% year over year last month, after doubling a year earlier. In other words, in-store sales drove virtually all of Costco's growth in August, as members continued to flock back to the company's warehouses despite a sharp uptick in U.S. COVID-19 case numbers and hospitalizations attributable to the delta variant.
Image source: Costco Wholesale.
Costco recorded mid-to-high single-digit comp sales growth for all of its core merchandise categories in August. But comp sales skyrocketed more than 40% for its ancillary businesses -- led by its gas stations, food courts, and pharmacies -- boosting the company's adjusted comp sales growth to more than 9%.
Including the tailwinds from higher gas prices and a weaker U.S. dollar, raw comparable sales jumped 14.2% last month, and net sales reached $15.75 billion: up 16.2% year over year.
An excellent finish to a phenomenal year
Investors shouldn't make any major decisions based on a single month of sales. However, Costco's stellar August sales report capped a year of consistently strong growth.
For its full 2021 fiscal year, Costco posted 13.4% adjusted comparable sales growth. It grew its top line by nearly $30 billion, as net sales surged 17.7% to $192.1 billion, compared to $163.2 billion in fiscal 2020. For the fourth fiscal quarter, net sales rose 17.4% to $61.4 billion, beating the average analyst estimate by more than $1 billion.
Costco's ability to grow at such an impressive rate over the course of an entire year should give investors confidence that the company's recent market share gains will prove durable.
Costco stock may be ready for a breather
Investors have rewarded Costco richly for its excellent results. Costco stock has gained more than 30% over the past year, reaching a new all-time high on Thursday. The shares have rallied 50% since touching a 52-week low in early March.
Costco Wholesale stock performance, data by YCharts.
As a result, Costco stock now trades for nearly 40 times forward earnings. This is an unprecedented valuation for the company.
On the bright side, Costco has enormous long-term expansion potential. It currently operates in about a dozen countries, showing the broad appeal of its business model. Nevertheless, more than 80% of its warehouses are located in the U.S. and Canada, and those two core markets still account for the bulk of its store growth. This implies that Costco has a huge runway for international expansion.
On the other hand, Costco opens new locations at a very deliberate pace, so store growth only drives about 2% annual sales growth for the company. Meanwhile, a temporary jump in inflation and a short-term surge in retail spending have powered unusually high sales growth for Costco and many other retailers this year. Comp sales gains will likely moderate going forward. Finally, Costco's operating margin had been quite stable prior to the pandemic, suggesting that in the long run, its earnings will grow only as quickly as sales.
Costco Wholesale operating margin (TTM), data by YCharts. TTM = trailing 12 months.
Based on these factors, investors can potentially expect 10% annual long-term earnings growth from Costco. That's quite solid, but investors interested in buying Costco stock still might find it worthwhile to wait for a better entry price.
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Adam Levine-Weinberg owns shares of Costco Wholesale. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Costco members clearly valued the ability to buy a wide range of food, household essentials, and discretionary items at great prices in a single stop. In other words, in-store sales drove virtually all of Costco's growth in August, as members continued to flock back to the company's warehouses despite a sharp uptick in U.S. COVID-19 case numbers and hospitalizations attributable to the delta variant. Costco's ability to grow at such an impressive rate over the course of an entire year should give investors confidence that the company's recent market share gains will prove durable. | For its full 2021 fiscal year, Costco posted 13.4% adjusted comparable sales growth. During the first six months of the COVID-19 pandemic, consumers flocked to Costco Wholesale (NASDAQ: COST). Costco members clearly valued the ability to buy a wide range of food, household essentials, and discretionary items at great prices in a single stop. | Many investors questioned whether the uptick in Costco's sales growth last year was sustainable. For its full 2021 fiscal year, Costco posted 13.4% adjusted comparable sales growth. During the first six months of the COVID-19 pandemic, consumers flocked to Costco Wholesale (NASDAQ: COST). | Comp sales rose 10.1% in the U.S. -- Costco's most mature market -- outpacing the company average. The Motley Fool owns shares of and recommends Costco Wholesale. During the first six months of the COVID-19 pandemic, consumers flocked to Costco Wholesale (NASDAQ: COST). | null |
14,039 | 626,237 | 2021-09-02 00:00:00 UTC | Interesting COST Put And Call Options For October 22nd | COST | https://www.nasdaq.com/articles/interesting-cost-put-and-call-options-for-october-22nd-2021-09-02 | null | null | Investors in Costco Wholesale Corp (Symbol: COST) saw new options become available today, for the October 22nd expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the COST options chain for the new October 22nd contracts and identified one put and one call contract of particular interest.
The put contract at the $455.00 strike price has a current bid of $9.80. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $455.00, but will also collect the premium, putting the cost basis of the shares at $445.20 (before broker commissions). To an investor already interested in purchasing shares of COST, that could represent an attractive alternative to paying $459.61/share today.
Because the $455.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 57%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 2.15% return on the cash commitment, or 15.72% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Costco Wholesale Corp, and highlighting in green where the $455.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $475.00 strike price has a current bid of $5.90. If an investor was to purchase shares of COST stock at the current price level of $459.61/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $475.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 4.63% if the stock gets called away at the October 22nd expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if COST shares really soar, which is why looking at the trailing twelve month trading history for Costco Wholesale Corp, as well as studying the business fundamentals becomes important. Below is a chart showing COST's trailing twelve month trading history, with the $475.00 strike highlighted in red:
Considering the fact that the $475.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 1.28% boost of extra return to the investor, or 9.37% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example above is 18%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $459.61) to be 18%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Of course, a lot of upside could potentially be left on the table if COST shares really soar, which is why looking at the trailing twelve month trading history for Costco Wholesale Corp, as well as studying the business fundamentals becomes important. Below is a chart showing COST's trailing twelve month trading history, with the $475.00 strike highlighted in red: Considering the fact that the $475.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Costco Wholesale Corp (Symbol: COST) saw new options become available today, for the October 22nd expiration. | Below is a chart showing the trailing twelve month trading history for Costco Wholesale Corp, and highlighting in green where the $455.00 strike is located relative to that history: Turning to the calls side of the option chain, the call contract at the $475.00 strike price has a current bid of $5.90. Below is a chart showing COST's trailing twelve month trading history, with the $475.00 strike highlighted in red: Considering the fact that the $475.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Costco Wholesale Corp (Symbol: COST) saw new options become available today, for the October 22nd expiration. | Below is a chart showing the trailing twelve month trading history for Costco Wholesale Corp, and highlighting in green where the $455.00 strike is located relative to that history: Turning to the calls side of the option chain, the call contract at the $475.00 strike price has a current bid of $5.90. Below is a chart showing COST's trailing twelve month trading history, with the $475.00 strike highlighted in red: Considering the fact that the $475.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Costco Wholesale Corp (Symbol: COST) saw new options become available today, for the October 22nd expiration. | At Stock Options Channel, our YieldBoost formula has looked up and down the COST options chain for the new October 22nd contracts and identified one put and one call contract of particular interest. Below is a chart showing COST's trailing twelve month trading history, with the $475.00 strike highlighted in red: Considering the fact that the $475.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Costco Wholesale Corp (Symbol: COST) saw new options become available today, for the October 22nd expiration. | null |
14,040 | 626,239 | 2021-09-01 00:00:00 UTC | The 7 Best Startups the Crowd Likes on StartEngine Right Now | COST | https://www.nasdaq.com/articles/the-7-best-startups-the-crowd-likes-on-startengine-right-now-2021-09-01 | null | null | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
“Invest, Trade, and Build Your Startup Portfolio.” This is a motto on equity crowdfunding platform StartEngine. If you are looking to invest in strong, young growth companies; discover new promising investment ideas; and trade on a secondary market for startups then you can visit StartEngine. There, you can explore the large list of options and narrow down your investment criteria for the best startups for your portfolio.
The site allows you to search by specific industries, most funded companies or companies that will soon end their equity crowdfunding campaigns.
For this article, the criteria I used to select my picks was the best startups that are currently among the site’s most funded offerings.
As always, it is advisable to be fully aware of all risks related to startup investing, such as potential business failure and loss of capital to name a few.
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Below are some of my top picks on StartEngine right now:
StartEngine
Rentberry
AsomBroso
Jet Token Inc.
Battle Approved Motors
Sugarfina
GoSun Inc.
Best Startups: StartEngine
Source: Pavel3d/ShutterStock.com
Let’s kick off our list of the best startups with the site that allows us to invest in them. One of the first things you read when visiting StartEngine’s offering is “This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment.” I like that full transparency — it’s realistic and helps investors understand the potential pitfalls. But if you are ok with this risk, then you may be interested in investing in StartEngine for several reasons.
There is growth in the number of investors joining this equity crowdfunding platform, but also growth in the money raised of the companies and also revenue growth too. StartEngine mentions that “Companies have raised over $400M on StartEngine, $200M+ of which was raised in the past 12 months alone.” It also touted $12.5M in revenues in 2020, up 190% year over year.
These are impressive figures. But StartEngine has a bold vision too. And it has Kevin O’Leary in its corner as a strategic advisor.
As for the business model, StartEngine makes money from several streams of revenue, such as platform fees, service fees and trading fees.
The minimum investment in StartEngine is $500.
Rentberry
Source: Shutterstock
Rentberry wants to be the future of real estate. It is a global home rental platform to change the long-term rental process into an all-digital experience built on safety and transparency.
What if you could rent a property or list your property for rental without the intermediaries of agents or brokers? Rentberry offers this service, having benefits both for tenants and landlords.
Landlords can analyze online applications, searching for quality leads based on screening criteria to increase their odds of receiving on-time rent payments.
Tenants, meanwhile, can have a full rental experience, gaining time as everything is done online using intelligent analysis. Two other reasons to invest in RentBerry are the fact that more than $13 million has already been raised by institutional investors, and that there are one million monthly active users.
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Rentberry considers this to be a market opportunity of $7 billion. And it is not just focused on a single area — in 2020, 11 million properties in 87,000 cities were reached. This offers notable diversification benefits.
The minimum investment in Rentberry is $300.15.
Best Startups: AsomBroso
Source: zef art/ShutterStock.com
Are you a tequila fan? If yes then you may find AsomBroso — a maker of not just tequila but an ultra-premium tequila — interesting to invest in. And luckily, many important factors show this startup has already traction.
For starters, over the years AsomBroso has earned several awards, and the quality is reflected in sales of more than $20 million. Add to that a growing global market — AsomBroso reports that “The global Tequila market size is projected to reach USD 7746.7 million by 2026, from USD 5784 million in 2021.”
AsomBroso is produced and bottled in Mexico but is available in many U.S. states via well-known retailers such as Kroger (NYSE:KR) and Costco (NYSE:COST). But even better, AsomBroso has also sales in other countries, such as in U.K. and Germany, with plans for further expansion in Canada, Australia and Mexico.
Sometimes mixing passion with tradition to innovate is a recipe for success, and this is the focus of Asombroso. You can invest in Asombroso with a minimum amount of $480.
Jet Token Inc.
Source: frank_peters / Shutterstock.com
Have you ever wondered how it would be like to book a private jet — experiencing that luxurious style of travel, with you as the main passenger?
Jet Token Inc. wants to solve problems that exist in the private jet industry. It is an app — or more precisely, it’s a combination of a private jet membership and booking platform to help you book both private jet and commercial airline tickets.
Jet Token Inc. is planning to buy a small fleet of HondaJets that will be used both for membership purposes and also charter flights in the Western U.S.
Booking a private jet has several problems — it is costly, there are hardly any refunds, and you get charged with a penalty should you decide to terminate membership.
With Jet Token, there is a new experience for commercial and private travel, with many options and price ranges for your next flight. “Private jet travel is a multi-billion dollar industry” and Jet Token is offering both private and commercial bookings. That translates into savings for its customers.
Even blockchain forms of payments in addition to more traditional ways of paying, such as a credit card, are offered.
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Why? To satisfy the demand of tech-savvy investors who have accumulated wealth using blockchain technology.
The minimum investment in Jet Token is $99.
Best Startups: Battle Approved Motors
Source: Shutterstock
When you read the vision of Battle Approved Motors most probably you will get overwhelmed. “We want our Electric UTV to be like Ferrari meets Tesla in the dirt. Battle Approved Motors (BAM) develops electric vehicle technology for work and performance-based off-road vehicles.”
Ferrari and Tesla? And not in a sportscar, but instead in the ultimate UTV (utility task vehicle)? And an all-electric one? If you think this is a fascinating idea then BAM Legacy Membership may be right for you. With membership you get offered access to products and events, and the opportunity to participate in the private testing facility with the option to order ahead of the general public.
There is not just one but three models, all of which embrace luxury and performance without neglecting style.
I admit I did not know that the UTV market is both large and still growing. According to BAM’s page on StartEngine, “The utility task vehicles market was valued at US $4.12 billion in 2017 and estimated to grow with a CAGR of 6.7% during the forecast period from 2018 to 2026.”
You can invest in Battle Approved Motors for a minimum amount of $325.
Sugarfina
Source: Nataliia Pyzhova/ShutterStock.com
Sugarfina wants to make our daily life as sweet as possible. But not just for children — this time, it’s candy for adults. Kudos to this, as adults love candy too.
Sugarfina targets a specific demographic target — influential women who love to be fashionable.
Sugarfina mentions that 90% of its customers are women. The brand has invested in several well-sought features such as a mix of luxury, a high quality, and a design that is both fun and highly beautiful.
The traction is present, with sales of about $25 million in 2020 and expansion plans not just in the U.S. but on an international level. And there is a big partnership with international candy makers, from the U.S. to Europe.
7 of the Best Dividend Stocks to Buy for September
Candy is a growing market and a business opportunity. The company quoted a MarketWatch article as saying, “analysts predict that the global market for confections will reach $214B by 2026, up from $190B.” The business model is covering both direct sales to consumers but has incorporated retail sales as well.
You can invest in Sugarfina for a minimum amount of $507.15.
Best Startups: GoSun Inc.
Source: Shutterstock
Thee last of this list of the best startups, GoSun Inc., is all about solar energy. In many countries, solar energy is a great option as long as you have the right technology to cover various consumer needs.
GoSun has evolved over the past years, offering smart solutions using solar energy. It started out with solar ovens at first, but now offers a wide range of products such as portable fridges, lighting, water purification and even power generators.
The traction is present, with reported revenue of $3.9 million in 2020, 100,000 units sold and availability in 70 countries. And with several awards such as its most recent, when it was a CES Innovation Award honoree in 2021.
The addressable markets of outdoor recreation and disaster relief are both very large. And the broader solution offered by GoSun is multi-dimensional, allowing people to save money, help the climate and live healthier.
The minimum investment in GoSun is $250.
Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
Read more: Private Investing Risks
On the date of publication, Stavros Georgiadis, CFA did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Stavros Georgiadis is a CFA charter holder, an Equity Research Analyst, and an Economist. He focuses on U.S. stocks and has his own stock market blog at thestockmarketontheinternet.com/. He has written in the past various articles for other publications and can be reached on Twitter and on LinkedIn.
The post The 7 Best Startups the Crowd Likes on StartEngine Right Now appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Add to that a growing global market — AsomBroso reports that “The global Tequila market size is projected to reach USD 7746.7 million by 2026, from USD 5784 million in 2021.” AsomBroso is produced and bottled in Mexico but is available in many U.S. states via well-known retailers such as Kroger (NYSE:KR) and Costco (NYSE:COST). Jet Token Inc. is planning to buy a small fleet of HondaJets that will be used both for membership purposes and also charter flights in the Western U.S. Booking a private jet has several problems — it is costly, there are hardly any refunds, and you get charged with a penalty should you decide to terminate membership. One of the first things you read when visiting StartEngine’s offering is “This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment.” I like that full transparency — it’s realistic and helps investors understand the potential pitfalls. | Add to that a growing global market — AsomBroso reports that “The global Tequila market size is projected to reach USD 7746.7 million by 2026, from USD 5784 million in 2021.” AsomBroso is produced and bottled in Mexico but is available in many U.S. states via well-known retailers such as Kroger (NYSE:KR) and Costco (NYSE:COST). Jet Token Inc. is planning to buy a small fleet of HondaJets that will be used both for membership purposes and also charter flights in the Western U.S. Booking a private jet has several problems — it is costly, there are hardly any refunds, and you get charged with a penalty should you decide to terminate membership. 7 Dividend Aristocrat Stocks to Buy in September for Gains and Stability Below are some of my top picks on StartEngine right now: StartEngine Rentberry AsomBroso Jet Token Inc. Battle Approved Motors Sugarfina GoSun Inc. Best Startups: StartEngine Source: Pavel3d/ShutterStock.com Let’s kick off our list of the best startups with the site that allows us to invest in them. | Add to that a growing global market — AsomBroso reports that “The global Tequila market size is projected to reach USD 7746.7 million by 2026, from USD 5784 million in 2021.” AsomBroso is produced and bottled in Mexico but is available in many U.S. states via well-known retailers such as Kroger (NYSE:KR) and Costco (NYSE:COST). Jet Token Inc. is planning to buy a small fleet of HondaJets that will be used both for membership purposes and also charter flights in the Western U.S. Booking a private jet has several problems — it is costly, there are hardly any refunds, and you get charged with a penalty should you decide to terminate membership. InvestorPlace - Stock Market News, Stock Advice & Trading Tips “Invest, Trade, and Build Your Startup Portfolio.” This is a motto on equity crowdfunding platform StartEngine. | Add to that a growing global market — AsomBroso reports that “The global Tequila market size is projected to reach USD 7746.7 million by 2026, from USD 5784 million in 2021.” AsomBroso is produced and bottled in Mexico but is available in many U.S. states via well-known retailers such as Kroger (NYSE:KR) and Costco (NYSE:COST). Jet Token Inc. is planning to buy a small fleet of HondaJets that will be used both for membership purposes and also charter flights in the Western U.S. Booking a private jet has several problems — it is costly, there are hardly any refunds, and you get charged with a penalty should you decide to terminate membership. 7 Dividend Aristocrat Stocks to Buy in September for Gains and Stability Below are some of my top picks on StartEngine right now: StartEngine Rentberry AsomBroso Jet Token Inc. Battle Approved Motors Sugarfina GoSun Inc. Best Startups: StartEngine Source: Pavel3d/ShutterStock.com Let’s kick off our list of the best startups with the site that allows us to invest in them. | null |
14,041 | 626,242 | 2021-08-31 00:00:00 UTC | This Scenario Will Cause Me to Buy Costco Stock | COST | https://www.nasdaq.com/articles/this-scenario-will-cause-me-to-buy-costco-stock-2021-08-31 | null | null | Costco (NASDAQ: COST) is demonstrating excellent operating performance during the pandemic. Revenue surged at the onset when non-essential retailers closed their doors and Costco remained open. Consumers had fewer places to spend their money, so those deemed essential stores benefitted from an increase in shoppers.
The company has been able to maintain that momentum even as economies are reopening. Its recent performance under strenuous conditions and its history of satisfying customers earned Costco a spot on my watch list.
Costco stock is trading at a forward price-to-earnings ratio of 42. Image source: Getty Images.
Here's what I am waiting for
It's important to note that Costco is a membership store. To gain access to shop at its warehouses, customers must pay an annual fee of either $60 for the basic membership tier or $120 for the executive tier. The latter comes with 2% cash back on your spending at Costco, which allows a consumer to earn back the membership fee after $6,000 spent during the membership year.
Historically, Costco raises prices on memberships about every five years. That time is approaching again, as it last raised fees in 2017. As of its most recent quarter, Costco boasted 60.6 million paying households. A $5 fee increase on all members would result in an additional $300 million in revenue, assuming very few membership cancellations. Considering Costco's renewal rate of 91%, that's not a wild assumption.
Nearly all of the company's membership revenue flows to the bottom line because it does not cost incremental dollars to implement a price hike. Of course, Costco might need to send out a notice in the mail and field a few questions, but in the grand scheme of things, it's a minor blip on the expense side.
To put that figure into context, in fiscal 2020, Costco earned an operating profit of $5.4 billion. So the $300 million from the membership fee increase could boost its operating profit by 5.5% annually.
There's a catch
I am probably not the only investor looking for Costco to raise membership fees. Others who follow the stock are likely also aware that a fee hike is approaching. Therefore, when Costco eventually makes the announcement, Costco's stock price might quickly jump in response. In that scenario, I would not buy the stock.
The stock is already running pretty fast and is up 18.5% year to date. The rise has it trading at a forward price-to-earnings ratio of 42, which is the highest it has traded at since at least January 2020. Some investors may be buying the stock in anticipation of the membership price increase. Some are buying it because of the company's excellent performance during the pandemic and its solid long-term prospects.
In any case, the stock is already a little pricey, but if Costco raises membership prices and the stock does not rise too much in response, I will likely add a position in this excellent business. If you are anything like me, you should also consider adding Costco to your watch list.
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Parkev Tatevosian has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Its recent performance under strenuous conditions and its history of satisfying customers earned Costco a spot on my watch list. Nearly all of the company's membership revenue flows to the bottom line because it does not cost incremental dollars to implement a price hike. Of course, Costco might need to send out a notice in the mail and field a few questions, but in the grand scheme of things, it's a minor blip on the expense side. | Costco (NASDAQ: COST) is demonstrating excellent operating performance during the pandemic. Costco stock is trading at a forward price-to-earnings ratio of 42. The latter comes with 2% cash back on your spending at Costco, which allows a consumer to earn back the membership fee after $6,000 spent during the membership year. | The latter comes with 2% cash back on your spending at Costco, which allows a consumer to earn back the membership fee after $6,000 spent during the membership year. Therefore, when Costco eventually makes the announcement, Costco's stock price might quickly jump in response. In any case, the stock is already a little pricey, but if Costco raises membership prices and the stock does not rise too much in response, I will likely add a position in this excellent business. | Historically, Costco raises prices on memberships about every five years. Costco (NASDAQ: COST) is demonstrating excellent operating performance during the pandemic. Revenue surged at the onset when non-essential retailers closed their doors and Costco remained open. | null |
14,042 | 626,244 | 2021-08-30 00:00:00 UTC | There’s More Value Than You Think in Walmart Stock | COST | https://www.nasdaq.com/articles/theres-more-value-than-you-think-in-walmart-stock-2021-08-30 | null | null | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Walmart (NYSE:WMT) stock might not represent the world’s most valuable company, but despite what The New York Times says, Walmart remains the world’s biggest retailer.
WMT) logo on Walmart store with clear blue sky in the background" width="300" height="169">
Source: Harun Ozmen / Shutterstock.com
By estimating the value of third-party products bought at Amazon.Com (NASDAQ:AMZN), the Times recently claimed the Seattle Cloud Czar had taken the crown, at a sales run rate of $610 billion.
Walmart’s sales for the 12 months ending in July were $566 billion.
But Amazon didn’t take ownership of all its inventory. More than half was sold by third parties, with Amazon just handling deliveries and back-office functions.
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Net product sales for the first half of 2021 were $115 billion. The real Amazon story is how service sales have nearly caught up and could surpass product revenue by 2022.
The real story of Walmart is it’s becoming increasingly like Amazon. It doesn’t have a cloud, but it has had an active third-party marketplace for years. Now Walmart has launched a delivery service, not just for those businesses, but other brick-and-mortar retailers.
WMT Stock and Amazon
There is no longer a difference between commerce and e-commerce; it’s all just retail. Whether you break bulk in a warehouse or a storefront makes no difference. Whether the customer takes their merchandise to a parking lot or picks it up from their stoop makes no difference.
Walmart CEO Doug McMillon has seen Amazon as his “great white whale” since taking the top job in Bentonville back in 2014. McMillon, now 54, is a Walmart lifer who began working at the chain part-time while still in high school.
Despite buying Jet.Com in 2016, Walmart has grown slowly under McMillon. Total sales were $476 billion in fiscal 2014, $559 billion in fiscal 2021.
Walmart deliveries will be handled by an Uber (NASDAQ:UBER)-like service called Spark, launched in 2018. Spark Drivers are treated as contractors rather than employees.
Walmart Marketplace was launched in 2009. Walmart began integrating its online marketplace with Shopify (NASDAQ:SHOP) last year. Shopify claims sales through its marketplace came to $172 billion last year. Walmart is even going after Amazon’s lead in ad-tech, through an alliance with The Trade Desk (NYSE:TTD).
What all this means, other than that the Times was wrong, is that there is unaccounted value inside WMT stock and potentially untapped profitability.
Who’s Really Gaining?
WMT stock opened trades today at around $146. That’s a price-to-earnings ratio of nearly 42. The 55 cent-per-share quarterly dividend, generous when the stock was cheaper, now yields just 1.46%.
McMillon’s focus on Amazon has had a cost. Long-time rival Target (NYSE:TGT) has been catching up to it. Over the last two years, Target stock is up 142%, nearly four times the gain of Walmart. Costco Wholesale (NASDAQ:COST) has scored more than twice its gains. Even Kroger (NYSE:KR) has done better.
As the country opens back up, Walmart is also giving raises, bonuses, and college tuition to maintain its 1.6 million member workforce. After fighting against a $15 per-hour minimum wage for years, its reputation among workers is now behind its performance.
The Bottom Line on WMT Stock
Walmart’s results are dramatically understated. Just as with Amazon, it’s not taking inventory risk with its marketplace. Its delivery service is also being handled through third parties.
If these were recorded as sales, the way the Times does with Amazon, Walmart would still be well ahead. But that doesn’t matter.
What matters is whether McMillon can pull together his online operations into a cohesive whole. Walmart is already the second-largest online retailer. The stock’s fate depends on his ability to narrow that gap, starting with the coming Christmas season.
On the date of publication, Dana Blankenhorn held long positions in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Living With Moore’s Law: Past, Present and Future available at the Amazon Kindle store. Write him at [email protected] or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.
The post There’s More Value Than You Think in Walmart Stock appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | McMillon’s focus on Amazon has had a cost. Costco Wholesale (NASDAQ:COST) has scored more than twice its gains. WMT) logo on Walmart store with clear blue sky in the background" width="300" height="169"> Source: Harun Ozmen / Shutterstock.com By estimating the value of third-party products bought at Amazon.Com (NASDAQ:AMZN), the Times recently claimed the Seattle Cloud Czar had taken the crown, at a sales run rate of $610 billion. | McMillon’s focus on Amazon has had a cost. Costco Wholesale (NASDAQ:COST) has scored more than twice its gains. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Walmart (NYSE:WMT) stock might not represent the world’s most valuable company, but despite what The New York Times says, Walmart remains the world’s biggest retailer. | McMillon’s focus on Amazon has had a cost. Costco Wholesale (NASDAQ:COST) has scored more than twice its gains. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Walmart (NYSE:WMT) stock might not represent the world’s most valuable company, but despite what The New York Times says, Walmart remains the world’s biggest retailer. | McMillon’s focus on Amazon has had a cost. Costco Wholesale (NASDAQ:COST) has scored more than twice its gains. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Walmart (NYSE:WMT) stock might not represent the world’s most valuable company, but despite what The New York Times says, Walmart remains the world’s biggest retailer. | null |
14,043 | 626,245 | 2021-08-29 00:00:00 UTC | Near All-Time Highs, Is Costco Stock Still a Buy? | COST | https://www.nasdaq.com/articles/near-all-time-highs-is-costco-stock-still-a-buy-2021-08-29 | null | null | Costco (NASDAQ: COST) stock has been a dependable all-star during the three and a half decades since its IPO. It has gained nearly 500% in the past 10 years and pays a growing dividend.
But as pandemic restrictions are easing in many regions, and Costco stock trades near all-time highs, is it still a bet for future growth?
Image source: Getty Images.
The unique success continues
Costco, like most large supermarket chains, typically demonstrates single-digit quarterly sales growth. That changed in 2020 when the pandemic powered higher sales as customers stocked up on essentials, and for the past four quarters, sales have increased by double-digit percentages year over year. In fact, its highest increase came in its most recent reported quarter, the fiscal third quarter ended May 9, with a 22% sales rise year over year. That happened as the economy began to reopen and people focused on nonessentials. Lest you think things may have slowed down dramatically since then, July sales increased 16%.
Costco struggled with supply issues for certain large items such as electric appliances over the past year, and it posted its incredible results with a low supply of expensive items. Some categories, such as travel and optical, were completely closed down for several months. But those trends have reversed with these categories functioning again, so even as essentials restocking slowed down, other sales ramped up.
E-commerce has decelerated as well, but it's still increasing, up 41% in Q3 and 7% in July. The company upgraded logistics for the e-commerce program, so delivery is faster and cheaper, and profit margins have improved. Costco faced inflationary pressures in Q3. The gross margin was slightly lower year over year. The company said that inflation may impact prices going forward, but so far it's trying to keep retail prices down. Costco's margins, generally about 11% to 12%, are lower than those of other retail chains. But it makes up for some of that in customer loyalty, through sheer volume and membership fees.
What the future holds
Costco is, believe it or not, fairly small in terms of store count. As of July, it operates 813 warehouses, with 562 in the U.S. and the rest international. It's nowhere near saturation, and it has plans to open new warehouses, but it goes pretty slowly in comparison with similar companies. Costco opened 21 net new stores so far in 2021 and is expecting to open 25 in each of the next two fiscal years. The company recently established a footprint in China for the first time, with plans for a second store. Costco is opening up an entirely new and huge market in the Middle Kingdom.
Walmart, by contrast, has almost 5,000 stores just in the U.S., while Target has over 1,900. Costco is the 12th-largest company in the U.S. by sales, far behind Walmart but way ahead of Target, which means each store makes it a lot of money. That's why it doesn't need to go on a frantic opening craze, and why investors can expect Costco to pursue careful growth for a very long time.
Costco's customers are loyal, and retention generally hovers around 90%, plus it adds millions of new customers annually.
Finally, its dividend only yields 0.66%, but Costco has raised the payout annually for the past 14 years and has paid a plush special dividend of between $5 and $10 per share every two or three years since 2013.
My conclusion is that investors shouldn't worry about buying near all-time highs. Costco can keep delivering growth and gains for investors well into the future.
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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | But as pandemic restrictions are easing in many regions, and Costco stock trades near all-time highs, is it still a bet for future growth? The unique success continues Costco, like most large supermarket chains, typically demonstrates single-digit quarterly sales growth. That's why it doesn't need to go on a frantic opening craze, and why investors can expect Costco to pursue careful growth for a very long time. | The unique success continues Costco, like most large supermarket chains, typically demonstrates single-digit quarterly sales growth. Costco (NASDAQ: COST) stock has been a dependable all-star during the three and a half decades since its IPO. But as pandemic restrictions are easing in many regions, and Costco stock trades near all-time highs, is it still a bet for future growth? | Costco opened 21 net new stores so far in 2021 and is expecting to open 25 in each of the next two fiscal years. Finally, its dividend only yields 0.66%, but Costco has raised the payout annually for the past 14 years and has paid a plush special dividend of between $5 and $10 per share every two or three years since 2013. Costco (NASDAQ: COST) stock has been a dependable all-star during the three and a half decades since its IPO. | Costco opened 21 net new stores so far in 2021 and is expecting to open 25 in each of the next two fiscal years. Costco (NASDAQ: COST) stock has been a dependable all-star during the three and a half decades since its IPO. But as pandemic restrictions are easing in many regions, and Costco stock trades near all-time highs, is it still a bet for future growth? | null |
14,044 | 626,246 | 2021-08-27 00:00:00 UTC | 11 Stocks for the Business of Weddings | COST | https://www.nasdaq.com/articles/11-stocks-for-the-business-of-weddings-2021-08-28 | null | null | Will Amazon.com's (NASDAQ: AMZN) department stores be a hit with shoppers? Who is the next CEO to announce retirement? What's the next big trend in alcohol sales? In this episode of Motley Fool Money, Maria Gallagher and Jason Moser tackle those questions, as well as the latest earnings from Walmart (NYSE: WMT), Target (NYSE: TGT), Lowe's (NYSE: LOW), Home Depot (NYSE: HD), Foot Locker (NYSE: FL), Nvidia (NASDAQ: NVDA), Farfetch (NYSE: FTCH), and Robinhood (NASDAQ: HOOD). Plus, they discuss Chipotle's (NYSE: CMG) newest menu item, share 11 stock ideas for the return of weddings and two stocks on their radar: Roblox (NYSE: RBLX) and Elastic (NYSE: ESTC).
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on Aug. 20, 2021.
Chris Hill: We've got the latest headlines from Wall Street. We've got a round of Buy, Sell, and Hold, and as always, we've got a couple of stocks on our radar. But we begin this week with a wide range of retail. First up is Target. Second-quarter profits and revenue were higher than expected. Same-store sales rose nearly 9%, and Target raised full-year guidance, and despite all that goodness, Jason, shares of Target down about 3% this week.
Jason Moser: Yeah, down a little bit this week and maybe that's a little bit of a reflection of where the stock was valued going into the week and perhaps a little bit of uncertainty for the back half of the year just based on the current situation. But I wouldn't let that take away enthusiasm for what this company is doing. To me, this is one of the premier retailers in the world. I don't think that's hyperbole. They stuck with their plan and it is straight-up working. Omnichannel doesn't even really seem to do them full justice and the numbers really, I think, bear that out. In the second quarter, the comparable sales as comps were up 8.9%, and that was on top of 24.3% a year ago. Clearly, a year ago it accelerated a lot. It's a difficult comp going into this year, but revenue grew 9.5% from a year ago. As a result, when you look at total sales for the quarter, they've grown more than 36% over the last two years alone. That's, to me, it's very telling. It shows in both traffic and tickets. Traffic continues to impress me. Traffic grew 12.7% in the quarter, and now tickets did decline. The actual average ticket did decline by just slightly 3.4%. I think that's to be expected.
We're not seeing the same sense of urgency on shoppers as we did a year ago. There isn't the same level of pantry stuffing going on. But I think when you look at the companies from an inventory perspective, inventory's up 26% from a year ago, so they're in a really good position, I think here, for the back half of the year. But then going to that plan, going to that omnichannel plan, when you look at the comparable digital sales, those grew 10% for the quarter. Now, that's on top of 195% growth from a year ago. Again, I think a year ago isn't necessarily a fair comp, but I think it shows that they're continuing the trend of growing. But it's the same-day services, whether it's in-store pickup, the drive up, the shift acquisition is really proving to be a tremendous one. But drive up has really impressed me and to put it into dollar terms here. Over the last two years, the second quarter sales through drive up alone had increased by nearly $1.4 billion. All along the way they've built up this tremendous rewards program. They now have more than 100 million Target circled rewards members now. We know how powerful those loyalty and rewards programs could be. All things considered, I think Target continues to really execute on their plan that they've laid out here over the last several years.
Hill: Shares of Walmart were up a bit this week and close to an all-time high. Second-quarter revenue was just over $140 billion. Foot traffic is growing, and so are same-store sales in the U.S., Maria.
Maria Gallagher: Yeah, so Walmart had their highest quarterly revenue ever for a three-month period outside of the holiday season. Like you said, total revenue was about $140 billion up 2.4%. They grew market share in grocery. Their comparable transactions were up 6.1%, led by in-store grocery transactions. Their e-commerce sales were up 6% year over year and 103% if you look at a two-year comp, and they're expecting global e-commerce sales to reach $75 billion for the year. In addition, same-club sales were up about 7.7% and e-commerce there grew about 27%. In general, their same-store sales gained momentum each month throughout the quarter. Their CFO, Brett Biggs, said that customers flocked to stores for items like luggage, party supplies, apparel and they're coming as if they're coming out of hibernation. I think as we get back into school season, as we then get into Halloween, and then it's Thanksgiving and then it's Christmas -- August starts propelling into fall, and fall is a non-stop time to go shopping for fun things to decorate your house. I see that continuing in the next couple of quarters as well.
Hill: I'm glad you mentioned the school, because Target talked about this, and Walmart also said they're seeing good numbers already in their back-to-school sales, which is so important for any retailer.
Gallagher: Yeah, and I think that the beauty of places like Walmart and Target is that you go in for one thing and then you leave with 900 things you didn't want. I think you go in for a school backpack and then all of a sudden you have 30 candles and a whole new wardrobe, and that's the beauty of these big retailers.
Hill: From general retail to home improvement. Home Depot and Lowe's both out with second-quarter reports this week, both posting profits that were higher than expected. But while Home Depot did not offer guidance for the full fiscal year, Lowe's raised their guidance, and that may have been one of the reasons shares of Lowe's were up 6% this week. Home Depot down just a little bit, Jason.
Moser: Yeah. Well, Maria, I have that same problem of going in with the intention of buying one thing and walking out with 500 whenever I go to Home Depot or a Lowe's. I guess I'm a mark for these two stores. But it does feel like the underlying story for both businesses. I think both businesses recorded very good quarters. I think the underlying story really is about the pro customer. They did see some pullback in the do-it-yourself demographic there, but the pro customer really stepped up and helped bring the results for both companies. When you look at Home Depot, again, dealing with a difficult comp given last year, but still very respectable numbers. Their sales of $41.1 billion, that was up just over 8% from a year ago. Comp sales were up 4.5%. U.S. comps were up 3.4%. Now, when you look at where margins are going with these companies, there's still a little bit of a challenge on the gross margin side. They saw gross margin for Home Depot down 80 basis points, and that was based really on inflationary costs, things like lumber and whatnot. But operating expenses remain in check. They're actually doing a very good job of dealing with this new paradigm on the operating side, so January operating margin was up 20 basis points. That was thanks, I think, to those ticket and transaction numbers. The average ticket grew 11.3% in the face of declining transactions. Transactions actually fell 6%. Again, understandable. There's not that same feeling of haste or consumers rushing to get into those stores and buy the things that they need. But when you look at the big-ticket customers, again, the big-ticket customers continue to perform very well.
Those transactions over $1,000, that was up 24% compared to a year ago. For me, when you look at what Home Depot is doing, inventories remain in check. The pro customer continued to really bring results which again, those outpaced the do-it-yourself customers. But we see that ebb and flow with Home Depot quarter-in and quarter-out. It's not really a surprise. In regard to Lowe's again, good numbers. Sales of $27.6 billion, that was relatively flat from a year ago. During the quarter they saw those comps actually decline 1.6% total and 2.2% for the U.S. Those two-year numbers are obviously painting a little bit of a different picture, though, so that's encouraging. Again, I think for Lowe's, the pro customer really performed. They saw the average ticket grow also 11.3%. That offset a declining transaction count rate, declining traffic of 12.9%. A little bit more exaggerated there than what we saw with Home Depot. But gross margin, I think, is a good story there. Gross margin declined only 30 basis points and they saw operating margin, on the other hand, expand 80 basis points. These companies are doing a very good job of handling the cost structures they've been handed given the past couple of years. I think in Lowe's case, you look at CEO Marvin Ellison, it's just been basically three years since he took the helm there. Stocks up 120% and the numbers are really I think bearing at the stock's points. He's got to be feeling really good about what he's done.
Hill: Shares of Foot Locker up nearly 10% on Friday after second-quarter profits and revenue came in higher than expected. Wall Street was also expecting negative same-store sales. Comps were up nearly 7%, Maria.
Gallagher: First of all, did you know that Foot Locker has almost 3,000 stores? Which is just so many more than I realized they had. But their total sales were up 9.5% to $2.2 billion. Their comp-store sales were up about 7%. They had strong results in women's and kids' footwear business with broad demand for apparel and accessories and you see that trend continuing as people spend more on athletic footwear and apparel throughout the pandemic and beyond. They also announced a quarterly dividend of $0.30 a share, which is about a 50% increase, and they have two recent acquisitions which are fueling its growth in Asia with Atmos and in a non-mall presence with WSS but still within that same category of shoe sales. They've been capitalizing on that growth in athleisure and are attempting to continue that as things get more back to normal, as people have maybe started going back to Foot Locker. They are saying, well, keep coming back, keep coming back.
Hill: Well, it's interesting, you mentioned all the locations for the namesake brand, but those acquisitions that they made, they do seem smart in part because it's a way for Foot Locker to diversify away from malls.
Gallagher: Yeah, and growing that demographic, I know they said WSS is used by people in the Latina demographic, Atmos is in Asia and so they're trying to diversify their customer base as well.
Hill: What's better than a company announcing a new product? When they use the announcement as a way to take shots at other companies. Details after the brakes, so stay right here. This is Motley Fool Money.
Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Maria Gallagher. Nvidia's stock is closing in on a new all-time high after second quarter revenue came in higher than expected. Guidance for the current quarter looks good. The only downside this week came when Nvidia told The Financial Times they may not meet the regulatory deadline on last year's $40 billion acquisition of ARM. It's a big deal, Jason, and regulators appear to be taking a long, hard look.
Moser: Yeah. I know the big question for Nvidia will revolve around this R&D, and that does make sense. I would encourage investors to not lose sight of the fact that this is still a very strong business, performing quite well on its own. Into that point, revenue for the quarter $6.5 billion, up 68% from a year ago, they noted they set records for total revenue in their gaming datacenter segment and professional visualization segment, and so breaking that down, gaming revenue of $3.1 billion grew 85% from a year ago, up 11% sequentially. Benefiting from very strong laptop demand, which seems pretty reasonable given what we know. The datacenter business, which is another tremendous part of the story, revenue of $2.4 billion, that was up 35% from the year-ago quarter. It's important to note, Nvidia is a key part of the tech that's going into these big customers' Cloud offerings.
When we're talking about Microsoft and Google and Amazon, Nvidia is a lot of what's making that stuff work. There's some stickiness there, so I think that's really encouraging for investors. The pro visualization segment of the business, clearly the smaller of the three, but still revenue $519 million up 156% from a year ago, benefiting from the changing work landscape. I think a neat part of the story, lookout for Nvidia omniverse, this is an offering, a platform they had. This is going to be a big piece of the development of the metaverse. We're going to hear more and more about this metaverse here in the coming years from companies like Roblox and whatnot out there doing what they do. To me, I continue to invest in Nvidia inception, which is essentially their acceleration platform for AI start-ups. They've got funding of over $60 billion and members in 90 countries on this inception platform and that is really I think promoting strong continuing investments in AI, which is going to be a very big story here over the coming decade, and one, you continue to see more and more throughout the quarters with Nvidia.
Hill: Farfetch, the online luxury fashion platform grew revenue in the second quarter by more than 40%, but shares fell by more than 6% this week. Maria, they're growing their gross merchandise volume along with their revenue. Is the drop in Farfetch a buying opportunity?
Gallagher: I think it could be. I think it's really this leader and it carved itself out in this online luxury space, which is really a niche. It has 1,300 luxury sellers, three million active customers. Their GMV was up 40% over $1 billion as last quarter with that high take rate of 30%. That revenue increased about 43% to $523 million. They also launched some really cool things on their platform. They have an immersive 3D shopping experience. They have virtual try and capabilities. They launched a kids wear fashion, that's still very expensive, very luxury. I have a note here that says, "I found a candle I like, and it's only $120." It really has this niche in online commerce, but with retail, and when you have those brands, when you have cultivated relationships with those brands, I think that that's a pretty valuable, intangible growth driver for them.
Hill: Shares of Robinhood falling 15% this week. The trading apps' first report as a public company came with a warning that trading activity is slowing down. Recent trading is Robinhood's business. I get why the stock is down.
Moser: Yes. He said it. Maybe they need as many transactions as they can get their hands on. They say they want to become the most trusted and most culturally relevant money app worldwide, and I don't doubt that, but they are today catering to a market where they're going to be some big hurdles to clear. The word association. When you say Robinhood, the first couple of words coming in mind are stonks and crypto, and the like, memes. This is just not where you want to be, I think in your first reportable quarter year, but here's where we are. Crypto revenue grew to $233 million, up from just $5 million a year ago. Options are up 48% to $165 million. You can see, this is a platform that while it may be good at what they do, they are catering to a unique demographic and when you look at that actual demographic, net cumulative funded accounts reached 22.5 million, that's up 130% from a year-ago. Monthly active users, 21.3 million, that's up 109% assets under custody reached $102 billion, up 205%. That's all great. But what it all boils down to is you have an average $4,500 account there. These aren't big ticket customers and I would imagine the median is actually much lower than that average, this is just aren't high-value clients today. What's worse is they're trading a lot. That can be a recipe for very lumpy business. They're going to have to figure out a way to reconcile that, but all things considered. It certainly could have been worse.
Hill: On Thursday, Chipotle announced it's testing a plant-based Teresa alternative in Denver and Indianapolis. The company says this new product will come from, "Ingredients grown on a farm and not a lab." Maria, I like innovation, but I really like the shade that Chipotle is throwing at Beyond Meat and Impossible Foods.
Gallagher: Yeah. I think the actual even sassier part of the press release was made with ingredients you can pronounce and never frozen. You see both of those Impossible and Beyond in the frozen aisle, and I actually looked at the ingredients for both Beyond Meat and Impossible, and Beyond Meat only has one thing I can't pronounce, and the ingredients for Impossible Foods, there are a lot of words I can't pronounce in that ingredient list. I think that what they say that they are ingredients are going to be our Chili Chipotle peppers, tomato paste, crushed garlic, paprika, olive oil, and natural protein source from peas. I think it's just showing this shifting consumer demand where there are a lot more people who are interested in plant alternatives or they have friends who are vegetarians and they have to have options for friends when they go out to eat. I think that's just a continued shift in that consumer appetite for these types of foods.
Hill: Well it's their first plant-based protein new offering since 2014. Once again, Chipotle is taking their time with new offerings.
Gallagher: Yeah, it'll be interesting to see them testing it out in Denver and Indianapolis. I'd be interested to see how both of those markets react to it and see if they end up rolling it out throughout the country, and what that reception is.
Hill: Amazon has a surprising new business line and hard seltzer may have to make way for the newest trend in alcoholic beverages. Buy, Sell, or Hold is next. Stay right here. You're listening to Motley Fool Money.
Welcome back to Motley Fool Money, Chris Hill here with Maria Gallagher and Jason Moser. Time for a round of Buy, Sell, or Hold. I'll spot you up with an idea from the world of business and you tell me that if it were a stock, would you be buying, selling, or holding it? Jason, let's start with The Wall Street Journal reporting that Amazon is planning to open several large bricks-and-mortar retail locations this fall, starting in California and Ohio. Buy, sell or hold, Amazon department stores.
Moser: Well, Chris, I think I've been pretty clear through the years here that I like going to physical retail. I like that physical retail experience about as much as I like filing my taxes at the end of the year. It's just not something I'm gunning for as the consumer. To me, the advent of e-commerce and the convenience that it's offered has just been one of the most profound developments in my lifetime, particularly as a parent. I'm sure you feel the same way. My first inclination here is to say sell. I say this as an Amazon shareholder, and a very happy one at that. I've owned those shares for a long time and I don't have any reason to want to unload them. This isn't making me want to unload them, but I do have to ask the question, is this something that the world is really clamoring for? Is this something that people want? I'm not really sure that it is. Now that said, I could also see this as being perhaps some investment in fulfillment in disguise. Maybe this is just something where they're like, "Hey, you know what we're going to test and learn, and we're going to see if there's something there." Maybe it's not your traditional retail experience, maybe it serves some other purpose. We saw with the Fire Phone, it was pretty clear from the start, that wasn't to me, the greatest investment in the world, but they did learn from it. That's one thing that Amazon is really good at doing, is trying things and learning from them whether they succeed or fail. But I got to say sell here, man, I'm not feeling it.
Hill: Maria, what about you?
Gallagher: I'm going to with sell too. I think the best part about going to these big stores is browsing. I don't think that you want to go to Amazon to browse, because what you buy on Amazon are things you just need and you need them fast and you need them in the next hour today. I don't think you're going to walk into Amazon, a big warehouse and just browse and find the types of paper towels you want. I don't know how enjoyable of a store experience it will be. Also, I just find it ironic that they've put all of these places out of business to then create stores from their ashes.
Hill: I'm going to hold, but I will say it's very odd to say the phrase "Amazon department store" out loud. Last month, Disney's Black Widow took in $80 million in its opening weekend, making it No. 1 for the year so far. Maria, buy, sell or hold, that opening weekend record, standing for the rest of the year. I will just add that we've got a couple of more big Marvel movies coming later in the year, along with the next James Bond movie and the Top Gun sequel.
Gallagher: I'm going to say sell, I think that they have two new Marvels coming out; you have Spider-Man, you have Shang-Chi, you have a new Wes Anderson movie coming out that I didn't realize that has a pretty stacked cast, that has, like, Timothee Chalamet, Elisabeth Moss, Frances McDormand. There are kids movies coming out. I think that there's just bound to be another big blockbuster ahead.
Hill: Jason, what about you?
Moser: Yeah, that's a tremendous performance in a volatile time, I'm going to sell. I think when you look at the schedule of movies that are getting ready to come out, there are just too many opportunities to beat that number. A lot of good movies that you guys quoted there, the one that I think is actually going to really beat it though, and I don't know, this is just what I think, but Halloween Kills is coming out this year. People have been really looking forward to this sequel. Halloween, a very, very powerful franchise through the years. What the hell, Michael Myers can't die. These movies can go on forever. They tell an amazing story that sometimes borders on the absurd, but yet people just continue to flock to this movie story. To me, Halloween Kills is going to be the one that takes us over-the-top. If for some reason I'm wrong, which certainly could be the case, listen, Venom. Venom, Let There Be Carnage, just on the title alone. I'm not the biggest going-to-the-movie guy, I'm a little bit more of a let's-watch-it-in-the-living-room guy, but I could see Venom pulling that off as well. Then finally, I just can't wait for The Many Saints of Newark, I'm a tremendous Sopranos fan. I feel like it's one of the best shows ever made, but even I'm most likely going to stream that on video when it comes out.
Hill: Let me add a couple of more numbers for anyone wondering, how bad is it from movie theaters out there. Two years ago, obviously 2020 was a wash. But in 2019, the No. 1 opening weekend at the box office was Avengers: Endgame. $357 million, the $80 million opening weekend that Black Widow had this year, that would not have been in the top 10 opening weekend finishes in 2019. A rough road ahead from movie theaters. I'd say this is someone who enjoys going to the movies. Jason, one of the big headlines from the first half of this year was Jeff Bezos announcing his retirement as CEO of Amazon. Buy, sell or hold, another big name CEO announcing their retirement before the end of the year.
Moser: Well, I was going to go with Johnson & Johnson, Chris, that would seem like we can drive that one. That was news that came out after we had already started kicking around this idea, just the timing was amazing. Yes, I do want to sign up for your clairvoyant investing service by the way. I think I am going to go a little bit outside the top 20 largest companies, but I'm going to pull one that we're all very familiar with and I'm sorry, Matt Greer, this is not targeted at you. I think it's totally plausible that Craig Jelinek at Costco decides to go ahead and hang it up by the end of this year. It's not for anything other than the fact that he's been doing this for a long time and he's done a really good job. He's got nothing to prove. He's coming up on 70 years old, he's been with the company since 1984, he's been the CEO since 2012, he held the COO position, he has just such a tremendous track record with this business. It's not the most difficult business in the world to understand. It all boils down to just making sure that they take care of their members and that's what they've just done for so long so well. I think that Craig Jelinek could absolutely be on the table as one we will see hanging it up here by the end of the year.
Hill: Maria, what about you?
Gallagher: I think there is probably going to be another one. I would say maybe Jamie Dimon at JPMorgan. I think he's 65, he's been the CEO for over 15 years, he's had heart problems in the past, he's openly talked about his succession plan, so that would be my guess as I think that might happen before the end of the year.
Hill: That sounds like a couple of buys right there from both of you. It's interesting because those are two CEOs that if you're shareholders of those companies and you both touched on this, you can feel really good that the succession plan is in place. It's tough to plan and execute a really strong succession when it comes to CEOs, but Jim Sinegal did a brilliant job tapping Craig Jelinek, and I'm sure whenever Jelinek decides to step aside, he'll have his successor in place, Jamie Dimon, yeah. Jamie Dimon is the smartest guy on Wall Street, so yeah, he's got that plan.
Moser: I'd love to get your opinions on us too, because the wildcard that came to my head, this is probably going to get a couple of gripes here, don't at me, but Elon Musk. This is nothing against Musk, but I think he's publicly stated more than once that his goal isn't really to be CEO of Tesla or a company. He's got a lot going on. At some point or another, I think most of us are at least expecting him to go ahead and step down as that CEO of Tesla to go focus on other things. Maybe just really give his whole attention to SpaceX. But yeah, it makes me wonder if Musk isn't trying to set the stage for him to be able to saunter off and go do other things. I don't know, what do you guys see?
Gallagher: I think the stock movement announcing Elon Musk move would be much more dramatic than either a Costco or a JPMorgan change, just because so much of the hopes and dreams of Tesla is tied up in the hopes and dreams of what Elon Musk specifically can do. I think that that would lead to pretty volatile movements for Tesla if that happened.
Hill: I don't remember what happened to shares of Costco when Jim Sinegal announced that he was stepping down. But I do remember that, and this is typical with Jim Sinegal, that it was part of their earnings press release and it was not the headline. It was the 10th thing in the press release. It was like "Oh and by the way, the co-founder and long time CEO is stepping down." Last one, Maria. In the past eight years, exports of Japanese sake have nearly tripled and now Wink, which is the big online wine membership club, has started offering sake for the first time. Buy, sell or hold, sake becoming the new hard seltzer.
Gallagher: I'm going to hold because I don't think I have enough knowledge of what's sake tastes like to know how it can function within, I think the beauty of hard seltzers that it just doesn't taste like anything, which is why a lot of people like it and bringing it to picnics and bringing it to outings and stuff. But I do think it's pretty interesting so they are saying that the sake market's growing about 5% to reach $10.4 billion in 2026. In comparison, the whiskey market is about $57 billion and the beer market is about $600 billion. But beer is the most common consumed drink after tea and water. I think it'd be hard to ever compare it to beer. But I do think it's growing pretty quickly, quicker than I would have asked that.
Hill: I don't know Jason, it really seems like an opportunity for a business like Diageo or Constellation Brands to add a sake brand to their portfolio. What do you think? Is this a buy, sell or hold?
Moser: As far as it being the new hard seltzer, I'm going to sell that. I don't know that we have quite the same market opportunity in existence for sale. But I will say, as someone who has enjoyed the beverage before, it has a unique taste. It's not for everyone, it's not for every occasion. But to Maria's point, we have seen a lot of growth here recently and there are currently around 20 or so sake breweries around the country versus just I think around five, maybe a decade ago. It is starting to grow in popularity. What you're seeing now is brewers infusing sake with different fruit flavors, or even carbonating it or using hops in their brewing. I know that sounds crazy, but it is different. It's something that strikes me a little bit. It's a little bit Dogfish Head-esque. That's what Dogfish Head has always been known for. It's off-center and that's the whole point of their brews. You could certainly see these folks taking sake and experimenting with it and trying new things. I think that alone will peak a lot of folks' interest there. How sustainable it is, how sticky it is. I'm still on the fence about that one. As far as it being a seltzer though, I think I'd sell that concept.
Hill: I can't decide which I'm less interested in, carbonated sake or Maria's $120 candle.
Gallagher: The candle is cute. I'll send it to you and then you can decide.
Hill: Up next, we've got a couple of thoughts on the business of weddings and a couple of stocks on our radar. Stay right here. This is Motley Fool Money.
Welcome back to Motley Fool Money, Chris Hill here with Maria Gallagher and Jason Moser. Our email address is [email protected]. We got an email from Eric B. He writes, "I've been a fan of the show over the last few years and you've truly helped me become a better investor." Thanks, Eric. That's why we do what we do. He goes on to ask, "What is the best way to get exposure to the wedding market/industry. With so many weddings postponed last year due to the pandemic, I'd expect a surge in demand later this year assuming we get a hold of the Delta variant and can resume reopening the economy. Are there any ETFs or stocks that would be good exposure to that industry?" Great question, Eric. Maria, you were saying during our production meeting earlier today that you have a bunch of weddings coming up.
Gallagher: Yeah, I'm at the age where a lot of people I know are planning to get married, about to get married, getting married soon. I think I would think about it in a couple of different ways. First is, where are they planning? The natural place to start thinking about planning a wedding, especially as more and more of them are in 2022, 2023, because all of these venues are booked up as the place to go is Pinterest. There's over 38 million Pinterest boards specifically dedicated to weddings. Then you start thinking where are they registering places like Target and Wayfair for more affordable options, places like Restoration Hardware for more high-end stuff if they're furnishing an apartment. Then how are they budgeting? How are they styling their wedding? Is it low key? Is it DIY? That's a lot of people in my life. You're looking at Etsy for ideas of things like bachelorette party favors, or ways to ask for bridesmaids or ways to decorate your wedding and make it special but in a more of an affordable way. Then lastly, it's just where are you shopping? Where people buy dresses, where people buy suits to attend. Anthropologie's owned by Urban Outfitters. I just recently bought a maid of honor dress from Anthropologie. My sister bought her wedding dress from Anthropologie. I think that if you look at it from all of these different angles about how people spend their time going to weddings, where people are spending their money when you're thinking about weddings. That's how I start thinking about that.
Hill: Wow. That's a six-stock basket for the comeback in weddings. What do you think, Jason?
Moser: Well, you know what all of this involves, Chris? It involves spending money. Am I right?
Hill: Yes.
Moser: Of course I'm right. It involves spending money. How's that money being spent? Say it with me kids, war on cash. You have to love all of these companies in this new fintech space, whether it's PayPal or Square. Look at the stalwarts like Visa, Mastercard, American Express. However, this money is being spent, look toward those types of businesses as well because that money is moving from point A to point B. That always to me, represents a great way to capitalize on any long-term market opportunity.
Hill: Thanks again for the question, Eric, and keep emails coming into [email protected]. Let's get to the stocks on our radar. Our man behind the glass, Dan Boyd, is going to hit you with a question. Maria Gallagher, you're up first. What are you looking at this week?
Gallagher: This week is Roblox. They just recently announced earnings. Their revenue was up 127%; bookings were up 35%; their daily active users were up 29%. Their hours engaged were 9.7 billion, which is up about 13%. I think what is really interesting with Roblox is how many people are there, how are they expanding that demographic to that above 13, continuing to expand internationally, and how are people spending their money on that platform? Digging into those numbers a little bit and understanding how people are spending their time and their money on Roblox is going to be really interesting.
Hill: The ticker symbol?
Gallagher: RBLX.
Hill: Dan, question about Roblox?
Dan Boyd: You know what, Chris, we talk about Roblox so much on this show. I have a confession. I don't really know what this company does, and at this point, I'm a little afraid to ask.
Gallagher: They created the metaverse. It's like new Sims, but it's all online. You go in, you have an avatar, you interact with other avatars and you play games. It's like the Sims, but you don't have to buy their CDD.
Boyd: Does the Roblox metaverse have that funny language that Sims speak?
Gallagher: I don't have a Roblox metaverse, but I think maybe. You just spend more money on Roblox because it's all online as opposed to buying the Sims game.
Hill: Jason Moser, what are you looking at?
Moser: Taking a look at Elastic; ticker is ESTC. Elastic is a company that offers to customers the tools to perform search, analysis, and visualization of all of this data that is out there to help businesses achieve the best outcomes possible. They will be reporting earnings next Wednesday after the market closes. There's been just a mediocre year to date. The stock is up a little bit but when they just wrapped up their fiscal year here recently, they did so with over 15,000 total subscription customers and more than 730 clients with annual contract values above $100,000. Approximately 93% of Elastic's revenue was tied to subscriptions. As customers get larger, so does their relationship with Elastic. In fact, more than 45% of customers with at least $1 million in annual contract value subscribed to all three of the company's primary solutions. That tells us that maybe there's some network effects to play here. There's some switching costs and some stickiness there to the business. I'll be interested to see what they have to say on Wednesday.
Hill: Dan, question about Elastic?
Boyd: Yes. Jason, I've got to ding you here, because Elastic was brought to the table within, I want to say, the last month and a half. Aren't there other stocks we can talk about, Jason?
Moser: Dan.
Boyd: I know that you're always talking about the War on Cash. You're always talking about your different technology stocks. Come on, Jason. Let's get a new stock in here.
Moser: Listen, man, I'm not after hearts and minds here, Dan. I'm just trying to make people money, and that's what we're doing here with Elastic, so I encourage you to keep an eye on this report next Wednesday. We'll take it from there. How about we cover it in next Friday's show? We'll see how things look.
Hill: Interesting choice you got to make here, Dan. One you want to add to your watchlist?
Dan Boyd: I'm going to go with Roblox, but it's because when I was in high school, a friend of mine had the Sims, and he made a character for me in the Sims and then his dad in the Sims locked me in the bathroom and I died. So that was a somewhat formative experience for me, and I'm just going to go with Roblox.
Hill: What a dark way to end the show. We're out of time. Maria Gallagher, Jason Moser, thanks for being here. Thanks for listening, everyone. We'll see you next week.
American Express is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Chris Hill owns shares of Amazon, Chipotle Mexican Grill, Costco Wholesale, Etsy, Home Depot, JPMorgan Chase, Johnson & Johnson, Lowes, Microsoft, PayPal Holdings, Pinterest, and Visa. Jason Moser owns shares of Amazon, Chipotle Mexican Grill, Etsy, Mastercard, PayPal Holdings, Square, Visa, and Wayfair. Maria Gallagher owns shares of Elastic, Etsy, PayPal Holdings, Pinterest, Square, and Visa. The Motley Fool owns shares of and recommends Amazon, Beyond Meat, Chipotle Mexican Grill, Constellation Brands, Costco Wholesale, Elastic, Etsy, Farfetch Limited, Home Depot, Mastercard, Microsoft, Nvidia, PayPal Holdings, Pinterest, Roblox, Square, Tesla, and Visa. The Motley Fool recommends Diageo, Johnson & Johnson, Lowes, and Wayfair and recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2022 $75 calls on PayPal Holdings, and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The Motley Fool owns shares of and recommends Amazon, Beyond Meat, Chipotle Mexican Grill, Constellation Brands, Costco Wholesale, Elastic, Etsy, Farfetch Limited, Home Depot, Mastercard, Microsoft, Nvidia, PayPal Holdings, Pinterest, Roblox, Square, Tesla, and Visa. They saw gross margin for Home Depot down 80 basis points, and that was based really on inflationary costs, things like lumber and whatnot. These companies are doing a very good job of handling the cost structures they've been handed given the past couple of years. | Chris Hill owns shares of Amazon, Chipotle Mexican Grill, Costco Wholesale, Etsy, Home Depot, JPMorgan Chase, Johnson & Johnson, Lowes, Microsoft, PayPal Holdings, Pinterest, and Visa. The Motley Fool owns shares of and recommends Amazon, Beyond Meat, Chipotle Mexican Grill, Constellation Brands, Costco Wholesale, Elastic, Etsy, Farfetch Limited, Home Depot, Mastercard, Microsoft, Nvidia, PayPal Holdings, Pinterest, Roblox, Square, Tesla, and Visa. They saw gross margin for Home Depot down 80 basis points, and that was based really on inflationary costs, things like lumber and whatnot. | They saw gross margin for Home Depot down 80 basis points, and that was based really on inflationary costs, things like lumber and whatnot. These companies are doing a very good job of handling the cost structures they've been handed given the past couple of years. I think it's totally plausible that Craig Jelinek at Costco decides to go ahead and hang it up by the end of this year. | Welcome back to Motley Fool Money, Chris Hill here with Maria Gallagher and Jason Moser. They saw gross margin for Home Depot down 80 basis points, and that was based really on inflationary costs, things like lumber and whatnot. These companies are doing a very good job of handling the cost structures they've been handed given the past couple of years. | null |
14,045 | 626,247 | 2021-08-26 00:00:00 UTC | Interesting COST Put And Call Options For October 8th | COST | https://www.nasdaq.com/articles/interesting-cost-put-and-call-options-for-october-8th-2021-08-26 | null | null | Investors in Costco Wholesale Corp (Symbol: COST) saw new options begin trading today, for the October 8th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the COST options chain for the new October 8th contracts and identified one put and one call contract of particular interest.
The put contract at the $440.00 strike price has a current bid of $6.85. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $440.00, but will also collect the premium, putting the cost basis of the shares at $433.15 (before broker commissions). To an investor already interested in purchasing shares of COST, that could represent an attractive alternative to paying $450.24/share today.
Because the $440.00 strike represents an approximate 2% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 1.56% return on the cash commitment, or 13.21% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Costco Wholesale Corp, and highlighting in green where the $440.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $460.00 strike price has a current bid of $7.10. If an investor was to purchase shares of COST stock at the current price level of $450.24/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $460.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 3.74% if the stock gets called away at the October 8th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if COST shares really soar, which is why looking at the trailing twelve month trading history for Costco Wholesale Corp, as well as studying the business fundamentals becomes important. Below is a chart showing COST's trailing twelve month trading history, with the $460.00 strike highlighted in red:
Considering the fact that the $460.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 1.58% boost of extra return to the investor, or 13.39% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $450.24) to be 18%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Of course, a lot of upside could potentially be left on the table if COST shares really soar, which is why looking at the trailing twelve month trading history for Costco Wholesale Corp, as well as studying the business fundamentals becomes important. Below is a chart showing COST's trailing twelve month trading history, with the $460.00 strike highlighted in red: Considering the fact that the $460.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Costco Wholesale Corp (Symbol: COST) saw new options begin trading today, for the October 8th expiration. | Below is a chart showing the trailing twelve month trading history for Costco Wholesale Corp, and highlighting in green where the $440.00 strike is located relative to that history: Turning to the calls side of the option chain, the call contract at the $460.00 strike price has a current bid of $7.10. Below is a chart showing COST's trailing twelve month trading history, with the $460.00 strike highlighted in red: Considering the fact that the $460.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Costco Wholesale Corp (Symbol: COST) saw new options begin trading today, for the October 8th expiration. | Below is a chart showing the trailing twelve month trading history for Costco Wholesale Corp, and highlighting in green where the $440.00 strike is located relative to that history: Turning to the calls side of the option chain, the call contract at the $460.00 strike price has a current bid of $7.10. Below is a chart showing COST's trailing twelve month trading history, with the $460.00 strike highlighted in red: Considering the fact that the $460.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Costco Wholesale Corp (Symbol: COST) saw new options begin trading today, for the October 8th expiration. | At Stock Options Channel, our YieldBoost formula has looked up and down the COST options chain for the new October 8th contracts and identified one put and one call contract of particular interest. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $440.00, but will also collect the premium, putting the cost basis of the shares at $433.15 (before broker commissions). Below is a chart showing COST's trailing twelve month trading history, with the $460.00 strike highlighted in red: Considering the fact that the $460.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. | null |
14,046 | 626,250 | 2021-08-24 00:00:00 UTC | SPLV, XDAT: Big ETF Inflows | COST | https://www.nasdaq.com/articles/splv-xdat%3A-big-etf-inflows-2021-08-24 | null | null | Comparing units outstanding versus one week ago at the coverage universe of ETFs at ETF Channel, the biggest inflow was seen in the Invesco S&P 500 Low Volatility ETF (SPLV), which added 20,740,000 units, or a 16.2% increase week over week. Among the largest underlying components of SPLV, in morning trading today Costco Wholesale (COST) is down about 0.5%, and Procter & Gamble Company (PG) is lower by about 0.5%.
And on a percentage change basis, the ETF with the biggest increase in inflows was the XDAT ETF (XDAT), which added 50,000 units, for a 33.3% increase in outstanding units.
VIDEO: SPLV, XDAT: Big ETF Inflows
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of SPLV, in morning trading today Costco Wholesale (COST) is down about 0.5%, and Procter & Gamble Company (PG) is lower by about 0.5%. And on a percentage change basis, the ETF with the biggest increase in inflows was the XDAT ETF (XDAT), which added 50,000 units, for a 33.3% increase in outstanding units. VIDEO: SPLV, XDAT: Big ETF Inflows The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of SPLV, in morning trading today Costco Wholesale (COST) is down about 0.5%, and Procter & Gamble Company (PG) is lower by about 0.5%. Comparing units outstanding versus one week ago at the coverage universe of ETFs at ETF Channel, the biggest inflow was seen in the Invesco S&P 500 Low Volatility ETF (SPLV), which added 20,740,000 units, or a 16.2% increase week over week. And on a percentage change basis, the ETF with the biggest increase in inflows was the XDAT ETF (XDAT), which added 50,000 units, for a 33.3% increase in outstanding units. | Among the largest underlying components of SPLV, in morning trading today Costco Wholesale (COST) is down about 0.5%, and Procter & Gamble Company (PG) is lower by about 0.5%. Comparing units outstanding versus one week ago at the coverage universe of ETFs at ETF Channel, the biggest inflow was seen in the Invesco S&P 500 Low Volatility ETF (SPLV), which added 20,740,000 units, or a 16.2% increase week over week. And on a percentage change basis, the ETF with the biggest increase in inflows was the XDAT ETF (XDAT), which added 50,000 units, for a 33.3% increase in outstanding units. | Among the largest underlying components of SPLV, in morning trading today Costco Wholesale (COST) is down about 0.5%, and Procter & Gamble Company (PG) is lower by about 0.5%. Comparing units outstanding versus one week ago at the coverage universe of ETFs at ETF Channel, the biggest inflow was seen in the Invesco S&P 500 Low Volatility ETF (SPLV), which added 20,740,000 units, or a 16.2% increase week over week. And on a percentage change basis, the ETF with the biggest increase in inflows was the XDAT ETF (XDAT), which added 50,000 units, for a 33.3% increase in outstanding units. | null |
14,047 | 626,252 | 2021-08-23 00:00:00 UTC | No, Netflix and Peloton Do Not Have Network Effects | COST | https://www.nasdaq.com/articles/no-netflix-and-peloton-do-not-have-network-effects-2021-08-23 | null | null | One of the strongest competitive advantages in the business world today is network effects. At a high level, this generally means that as a company gains additional users or customers, the product or service improves for everyone else.
While easy to comprehend, investors often mistakenly believe internet companies automatically possess this trait. Two popular companies in particular, Netflix (NASDAQ: NFLX) and Peloton (NASDAQ: PTON), are widely thought of as businesses with network effects.
But there is more to the definition I gave above. Let's dive in and understand why the misconception exists.
Image source: Getty Images.
Why Netflix and Peloton don't have true network effects
Netflix and Peloton actually own the means of production for their products and services. The streaming entertainment giant spends massive amounts of cash ($17 billion this year alone) to enhance and expand its vast content catalog. And the at-home fitness pioneer chooses which trainers to work with, what classes to offer, and what equipment to design and manufacture. The end user, whether it's someone watching TV or an exercise junkie, has no direct connection to that process for the business.
Compare this dynamic to companies like Uber, Airbnb, or Etsy with true network effects. All three of these companies simply facilitate a connection and transaction between users of its marketplaces. Uber doesn't own the cars that ferry passengers around the world. Airbnb doesn't own the properties that host millions of travelers every year. And Etsy doesn't own the merchandise sold on its website and mobile app. Netflix and Peloton, on the other hand, do take on the risk of producing their services and products, and this is a key distinction.
The common misconception
I often read or hear that if communities form around a product or service, then the company must have network effects.
There's an official Peloton member page on Facebook that has attracted over 434,000 people. Netflix's hit series Stranger Things also has a fan page on Facebook that 223,000 people follow. This does not, however, mean network effects are present.
Sure, these social communities can drive referrals and attract new customers. They can also increase engagement by encouraging users to take more classes or watch more content. This is no different than a restaurant or chiropractor in your hometown gaining customers by word-of-mouth advertising -- albeit on a much larger scale. The internet has simply made it easier for customers to connect with each other, which can apply to any company.
Gathering data is the curveball
There is something that complicates the argument for Netflix and Peloton having network effects though, and this is the large quantities of data they're able to collect. Both companies amass troves of data on their users. For example, Netflix knows what content viewers watch, when they watch it, how often they use the service, and more. Peloton is similar in that it knows what types of workouts are popular, how often connected fitness subscribers exercise, and so on.
More users equals more data. And with more data, these businesses can better direct their investments in technology and the user experience. This all creates a feedback loop. But again, I'm skeptical that this translates into a true network effect.
We don't associate Home Depot, Costco, or Starbucks with having network effects, but they also collect lots of data on their customers and their behavior -- all of which leads to better leverage with vendors and a continuous improvement in the shopping and ordering experience.
And in today's competitive landscape, if a company is not gleaning valuable insights from the data it gathers in order to improve the customer value proposition, then it will inevitably fall behind.
The investor takeaway
Netflix and Peloton are both outstanding businesses as they've each found tremendous success by disrupting outdated industries. Considering them as additions to your portfolio would certainly benefit long-term investors.
Just don't assume that all internet-based businesses have network effects, regardless of how popular they may be.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Neil Patel owns shares of Etsy and Starbucks. The Motley Fool owns shares of and recommends Costco Wholesale, Etsy, Facebook, Home Depot, Netflix, Peloton Interactive, and Starbucks. The Motley Fool recommends Uber Technologies and recommends the following options: short October 2021 $120 calls on Starbucks. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | We don't associate Home Depot, Costco, or Starbucks with having network effects, but they also collect lots of data on their customers and their behavior -- all of which leads to better leverage with vendors and a continuous improvement in the shopping and ordering experience. The Motley Fool owns shares of and recommends Costco Wholesale, Etsy, Facebook, Home Depot, Netflix, Peloton Interactive, and Starbucks. And in today's competitive landscape, if a company is not gleaning valuable insights from the data it gathers in order to improve the customer value proposition, then it will inevitably fall behind. | The Motley Fool owns shares of and recommends Costco Wholesale, Etsy, Facebook, Home Depot, Netflix, Peloton Interactive, and Starbucks. We don't associate Home Depot, Costco, or Starbucks with having network effects, but they also collect lots of data on their customers and their behavior -- all of which leads to better leverage with vendors and a continuous improvement in the shopping and ordering experience. At a high level, this generally means that as a company gains additional users or customers, the product or service improves for everyone else. | We don't associate Home Depot, Costco, or Starbucks with having network effects, but they also collect lots of data on their customers and their behavior -- all of which leads to better leverage with vendors and a continuous improvement in the shopping and ordering experience. The Motley Fool owns shares of and recommends Costco Wholesale, Etsy, Facebook, Home Depot, Netflix, Peloton Interactive, and Starbucks. Two popular companies in particular, Netflix (NASDAQ: NFLX) and Peloton (NASDAQ: PTON), are widely thought of as businesses with network effects. | We don't associate Home Depot, Costco, or Starbucks with having network effects, but they also collect lots of data on their customers and their behavior -- all of which leads to better leverage with vendors and a continuous improvement in the shopping and ordering experience. The Motley Fool owns shares of and recommends Costco Wholesale, Etsy, Facebook, Home Depot, Netflix, Peloton Interactive, and Starbucks. At a high level, this generally means that as a company gains additional users or customers, the product or service improves for everyone else. | null |
14,048 | 626,253 | 2021-08-21 00:00:00 UTC | BJ's Wholesale Club Earnings: 3 Takeaway Numbers | COST | https://www.nasdaq.com/articles/bjs-wholesale-club-earnings%3A-3-takeaway-numbers-2021-08-21 | null | null | BJ's Wholesale Club (NYSE: BJ) is a more attractive business today than it was before the pandemic struck. The retailer is winning market share in a competitive niche that has it battling with giants like Walmart (NYSE: WMT) and Costco (NASDAQ: COST). And its latest earnings report shows how BJ's can stand out from these peers even as it works to create its own national footprint.
Let's look at three key highlights from that earnings announcement.
Image source: Getty Images.
1. Two-year sales growth: 21%
BJ's sales declined as compared to last year's surging results, as expected. Comparable-store sales were down 3% after excluding gasoline price shifts, marking only a modest rebound compared to last quarter's 5% drop.
Zoom out a bit and you'll see confirmation of BJ's expanding market share. On a two-year basis, which smooths out the impact of the pandemic surge, comps are up 21%. Walmart (which operates Sam's Clubs as part of its retail holdings) announced earlier in the week that its two-year bounce was 14.5%. BJ's can celebrate having won some ground against even leading retailers like that. "We ... expanded our market share and continued to benefit from elevated consumer spending trends," CEO Bob Eddy said in a press release.
2. Gross profit margin: up 0.3 percentage points
Inflationary times like these tend to pressure earnings for warehouse retailers because low prices are a core reason shoppers visit these big-box giants. Yet BJ's hit the right balance between price leadership and profitability.
Gross profit margin edged higher thanks to a shift toward some of the shopping categories management has targeted, like consumer electronics, fresh food, and home furnishings. That extra demand offsets rising costs across the supply chain. Adjusted net income landed at 2.7% of sales compared to Costco's recent 2.5% rate.
These gains came despite aggressive spending on BJ's growth initiatives. "We have invested into our team members, the value of our membership, our digital infrastructure, and physical footprint to continue to accelerate our growth flywheel," Eddy explained.
3. Membership fee income: up 7.6%
Those improvements have all created a more valuable subscription for BJ's shoppers this year, and investors are starting to see the benefits from that boost. Membership fee income rose nearly 8% this quarter to outpace sales growth. The increase came from several factors, including a growing membership base and improving renewal rates.
BJ's is laying the foundation for additional increases in its annual fee structure, which will flow almost directly toward higher earnings. The retailer is entering the second half of 2021 with lots of cash, too, that executives can direct toward lower prices over the short term. Looking further out, they can target a more aggressive expansion into new markets and more attractive yet competitive neighborhoods.
Management couldn't venture a 2021 fiscal-year outlook this week, citing major risks including new COVID-19 outbreaks and uncertain consumer demand trends. But shareholders have every reason to expect the chain to stay on the offensive when it comes to growth. BJ's customers are telling the chain that they love the expanded merchandise categories and new services like curbside pickup. The company's task now is to keep rolling those offerings out to a selling footprint that reaches beyond its current regional focus.
10 stocks we like better than BJ's Wholesale Club Holdings, Inc.
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Demitri Kalogeropoulos owns shares of Costco Wholesale. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The retailer is winning market share in a competitive niche that has it battling with giants like Walmart (NYSE: WMT) and Costco (NASDAQ: COST). That extra demand offsets rising costs across the supply chain. Adjusted net income landed at 2.7% of sales compared to Costco's recent 2.5% rate. | The retailer is winning market share in a competitive niche that has it battling with giants like Walmart (NYSE: WMT) and Costco (NASDAQ: COST). That extra demand offsets rising costs across the supply chain. Adjusted net income landed at 2.7% of sales compared to Costco's recent 2.5% rate. | The retailer is winning market share in a competitive niche that has it battling with giants like Walmart (NYSE: WMT) and Costco (NASDAQ: COST). That extra demand offsets rising costs across the supply chain. Adjusted net income landed at 2.7% of sales compared to Costco's recent 2.5% rate. | The retailer is winning market share in a competitive niche that has it battling with giants like Walmart (NYSE: WMT) and Costco (NASDAQ: COST). That extra demand offsets rising costs across the supply chain. Adjusted net income landed at 2.7% of sales compared to Costco's recent 2.5% rate. | null |
14,049 | 626,254 | 2021-08-19 00:00:00 UTC | Target Stock Still Looks Like a Big Winner | COST | https://www.nasdaq.com/articles/target-stock-still-looks-like-a-big-winner-2021-08-19 | null | null | There's no question that one of the biggest winners during the pandemic was Target (NYSE: TGT), especially among retail stocks.
The big-box chain's same-day fulfillment strategy delivered outstanding results, and its hybrid model as both an essential and discretionary retailer drove sales growth across all of its major categories last year, from apparel to groceries. Comparable-store sales jumped 19.3%, and adjusted earnings per share rose 47%.
With the pandemic tailwinds fading and comparisons with the prior year getting more difficult, there were some questions coming into its second-quarter earnings report if its momentum would continue, but the retailer unquestionably delivered. Among the highlights were:
Comps rose 8.9% in the quarter, which translated into two-year comps growth of more than 35%.
Operating margin clocked in at 9.8%, down from 10% in the year-ago quarter, when the metric was inflated by lockdown-driven demand.
Adjusted EPS ticked up 8% to $3.64, ahead of the analyst consensus at $3.49.
Target's guidance also called for continued strong growth as management forecast high-single-digit comps growth in the second half of the year, at the high end of its previous guidance. And it projected an operating margin of at least 8% for the full year, though that guidance seems to be conservative considering that operating margin for the first half of the year was 9.9%. Management also announced a $15 billion share buyback, a sign it believes its stock is undervalued.
Despite the strong results, investors shrugged off the report, sending the stock down 1.7% in afternoon trading on Wednesday. That might not be a big surprise as the stock is up more than 40% year to date. However, the company's execution beyond the headline numbers indicates that Target still looks like a long-term winner. Here are a few of the things the company is doing right.
Image source: Target.
Owned brands are still on fire
One of the things that differentiates Target from its retail peers is the company's success at developing private-label brands. These brands both help distinguish the company from its competitors and act as a draw for customers. They also provide higher margins than name brands since Target controls every step of the process, including production, marketing, and distribution.
In the quarterly report, Target noted that owned brands grew in the mid-teens, outperforming the overall business, and the company pointed to standouts like Favorite Day, a dessert brand; Good & Gather, a packaged-food brand; and All in Motion, its athleisure brand.
The company also said it would launch a new pet food brand, Kindfull, in the quarter, in addition to ramping up its new partnership with Ulta Beauty, launching a collaboration with children's book author Christian Robinson, and introducing its fall designer collection.
Same-day fulfillment continues to shine
Unlike competitors such as Amazon and Walmart, which use distribution centers for most of their e-commerce orders, Target relies on stores to fulfill most of its online orders. And the heart of that strategy is same-day fulfillment, which allows customers to pick up their orders that day or get them delivered through Shipt with an additional fee. Using its stores to fulfill orders is both a cheaper and faster option than relying on distribution centers, and giving customers the ability to get orders that day is also often a better option than waiting several days at home for an order to arrive.
Overall, same-day fulfillment services grew 55% in the second quarter after 270% growth in the category a year ago. Drive Up (Target's name for curbside pickup) has been the star of same-day fulfillment during the pandemic, with sales up more than 80% after 700% growth in the quarter a year ago.
It's clear that Drive Up has resonated with customers, and that should continue to drive sales higher even as the pandemic fades.
Still a bargain
Target is arguably executing better than any other retailer in the country. It's posting strong growth and wide profit margins. It is increasing sales both in stores and online, and seeing growth across all five of its product categories.
However, investors still seem skeptical that the growth story can continue even as the company is opening new small-format stores; remodeling much of its existing store base; and spending $4 billion annually for improvements in its supply chain, last-mile delivery, and new stores and remodels. Investors actually balked at that news when the company announced the spending plan back in March, pushing the stock down 7%, but it has rallied 50% since then.
Today, Target trades at a very reasonable P/E ratio of less than 20, cheaper than Walmart, Costco Wholesale, and Home Depot.
That's an exceptionally low bar that the company needs to top in order for the stock to go higher. With the company targeting high-single-digit comps for the second half of the year, that shouldn't be a problem.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jeremy Bowman owns shares of Amazon and Target. The Motley Fool owns shares of and recommends Amazon, Costco Wholesale, Home Depot, and Ulta Beauty. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Today, Target trades at a very reasonable P/E ratio of less than 20, cheaper than Walmart, Costco Wholesale, and Home Depot. The Motley Fool owns shares of and recommends Amazon, Costco Wholesale, Home Depot, and Ulta Beauty. The big-box chain's same-day fulfillment strategy delivered outstanding results, and its hybrid model as both an essential and discretionary retailer drove sales growth across all of its major categories last year, from apparel to groceries. | The Motley Fool owns shares of and recommends Amazon, Costco Wholesale, Home Depot, and Ulta Beauty. Today, Target trades at a very reasonable P/E ratio of less than 20, cheaper than Walmart, Costco Wholesale, and Home Depot. Target's guidance also called for continued strong growth as management forecast high-single-digit comps growth in the second half of the year, at the high end of its previous guidance. | Today, Target trades at a very reasonable P/E ratio of less than 20, cheaper than Walmart, Costco Wholesale, and Home Depot. The Motley Fool owns shares of and recommends Amazon, Costco Wholesale, Home Depot, and Ulta Beauty. Target's guidance also called for continued strong growth as management forecast high-single-digit comps growth in the second half of the year, at the high end of its previous guidance. | The Motley Fool owns shares of and recommends Amazon, Costco Wholesale, Home Depot, and Ulta Beauty. Today, Target trades at a very reasonable P/E ratio of less than 20, cheaper than Walmart, Costco Wholesale, and Home Depot. Owned brands are still on fire One of the things that differentiates Target from its retail peers is the company's success at developing private-label brands. | null |
14,050 | 626,256 | 2021-08-17 00:00:00 UTC | 2 Solid Retail Stocks to Put in Your Shopping Basket | COST | https://www.nasdaq.com/articles/2-solid-retail-stocks-to-put-in-your-shopping-basket-2021-08-17 | null | null | The market has been a bit frothy, regularly hitting new record highs, but signs that China's economy might be slowing recently sent U.S. stock markets lower. We've had an amazing bull run that was interrupted by the pandemic, yet one that also quickly regained its footing to charge ahead once more.
No one can predict a market crash, but savvy investors know to prepare for one, regardless. Finding stocks that can weather such storms is good insurance against the inevitable, and the two retailers below have proved themselves in all types of market conditions.
Both Target (NYSE: TGT) and Costco (NASDAQ: COST) have proved their mettle over time. Now learn why they still offer investors that same sort of umbrella protection in the quarters and years ahead, even if the broader market has reached its peak.
Image source: Getty Images.
This one really hits the mark
Eric Volkman (Target): The one retailer that has consistently impressed me throughout the coronavirus pandemic is Target, which at this point needs little or no introduction to American consumers.
Even though it's been a familiar name in retail for decades, Target has really come into its own lately. The pandemic was and is a monster challenge that the company conquered beautifully.
In 2017, under pressure from market-share-stealing eCommerce players like Amazon, it ponied up $550 million for quick-delivery specialist Shipt. It also launched a set of order-pickup services.
Both initiatives blossomed to serve the company particularly well in the thick of the pandemic last year and continue to drive sales. Customers clearly love these options. For the entirety of fiscal 2020, Target's online comparable sales rose a whopping 143% last year to comprise almost 18% of total sales (2019 level -- just shy of 9%). Same-day services rose by an even more impressive 235%.
Growth might cool as we move through this year, but Target's top line should see improvement, regardless. Robust profitability is likely in the cards, too.
For the second half of 2021, the company is forecasting comparable-sales growth in the single-digit percentages. Although Target hasn't proffered any bottom-line projections, the average analyst estimate for per-share, annual non-GAAP (adjusted) net profit growth is a very impressive 30%. That's on the back of an anticipated 9% improvement in total revenue, compared to 2020.
Target has also been in the sights of dividend investors lately, thanks to the attention-getting 32% raise the company recently made to its quarterly shareholder payout. The company is a frequent lifter -- so much so that it's about to become one of the very few Dividend Kings on the market. These rare beasts are the S&P 500 companies that have raised their payouts at least once every year for a minimum of 50 years running.
Thanks to recent and pronounced share-price appreciation, Target's dividend yield isn't exceptionally high, at 1.4%. But this is one of the most reliable dividend payers on the scene, and the company has considerable organic growth in front of it.
Investors hunting for an ideal retail stock should consider pulling back their bows and firing squarely at this one.
Image source: Getty Images.
Join the club
Rich Duprey (Costco): There are few retailers with a more solid foundation on which to continue growing than Costco. It delivers not only for consumers, with its low prices and broad product selection, but also for investors.
The warehouse club buys in bulk and passes those savings onto consumers, who keep returning to its stores in droves. It just reported that comparable U.S. net sales for July, excluding fuel and currency-exchange rates, were up 8.5% for the month and are almost 14% higher year to date. Worldwide, Costco's comps were 8% and 13.8%, respectively, higher.
And though its cavernous warehouses get most of the attention, it has developed an extensive e-commerce presence that's also attracting returning shoppers. Online comps were up 5.7% last month and a whopping 47% year to date.
Even so, merchandise isn't where Costco makes its money. That comes from the memberships it sells. Over the first six months of Costco's fiscal year, the retailer generated over $2.1 billion in net earnings, or just a little more than the $1.7 billion it sold in memberships, indicating they're almost all pure profit.
Costco tends to raise its membership fees every five years. The last time it did so was in 2017, so it's due for another one soon. With 60.6 million paid worldwide households, that would be another $1.7 billion in revenue in its pocket, giving the retailer some very firm footing to keep growing.
10 stocks we like better than Costco Wholesale
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Eric Volkman has no position in any of the stocks mentioned. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Costco Wholesale. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Both Target (NYSE: TGT) and Costco (NASDAQ: COST) have proved their mettle over time. Join the club Rich Duprey (Costco): There are few retailers with a more solid foundation on which to continue growing than Costco. Worldwide, Costco's comps were 8% and 13.8%, respectively, higher. | Over the first six months of Costco's fiscal year, the retailer generated over $2.1 billion in net earnings, or just a little more than the $1.7 billion it sold in memberships, indicating they're almost all pure profit. Both Target (NYSE: TGT) and Costco (NASDAQ: COST) have proved their mettle over time. Join the club Rich Duprey (Costco): There are few retailers with a more solid foundation on which to continue growing than Costco. | Over the first six months of Costco's fiscal year, the retailer generated over $2.1 billion in net earnings, or just a little more than the $1.7 billion it sold in memberships, indicating they're almost all pure profit. Both Target (NYSE: TGT) and Costco (NASDAQ: COST) have proved their mettle over time. Join the club Rich Duprey (Costco): There are few retailers with a more solid foundation on which to continue growing than Costco. | Both Target (NYSE: TGT) and Costco (NASDAQ: COST) have proved their mettle over time. Join the club Rich Duprey (Costco): There are few retailers with a more solid foundation on which to continue growing than Costco. Worldwide, Costco's comps were 8% and 13.8%, respectively, higher. | null |
14,051 | 626,259 | 2021-08-16 00:00:00 UTC | Best Stocks To Buy Now? 3 Retail Stocks In Focus This Week | COST | https://www.nasdaq.com/articles/best-stocks-to-buy-now-3-retail-stocks-in-focus-this-week-2021-08-16 | null | null | 3 Top Retail Stocks To Watch This Week Amid Earnings
As we begin another week of trading, retail stocks could be taking center stage in the stock market. Namely, some of the biggest names in the industry are set to report their second-quarter earnings this week. Take Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW) for example. Now, with a resurgence in coronavirus cases, investors could be considering how things will play out in the retail space. Specifically, should these conditions persist, some would argue consumer home improvement retail trends could gain momentum. So far, both HD stock and LOW stock are looking at gains of over 110% since their pandemic-era lows.
On top of that, department store giants like Macy’s (NYSE: M) and Kohl’s (NYSE: KSS) could also be in focus. Aside from reporting their earnings on Thursday, the two companies have another thing in common. Both M stock and KSS stock are still trading below their pre-pandemic levels. Sure, the current updates on the pandemic could possibly put a damper on their brick-and-mortar services. However, the duo, like most names in the retail space, have better adapted their operations towards pandemic conditions. In fact, Macy’s is currently looking to achieve up to $10 billion in annual digital sales by 2023. This could indicate that the industry’s focus on e-commerce is more than just a reactionary play for the pandemic.
Overall, I can understand the current allure of retail stocks for investors now. On one hand, some could be looking to get in on the action this earnings week. On the other hand, others could see long-term growth potential in some of the top names in the market. With all this in mind, here are three retail stocks to note in the stock market today.
Best Retail Stocks To Buy [Or Sell] Today
Walmart Inc. (NYSE: WMT)
Costco Wholesale Corporation (NASDAQ: COST)
Target Inc. (NYSE: TGT)
Walmart Inc.
To begin with, we will be taking a look at Walmart. Seeing as it is the largest retailer in the world today, investors would be eyeing WMT stock now. For the uninitiated, the company primarily operates via its global network. The likes of which consist of hypermarkets, discount department stores, and grocery stores. On top of that, Walmart also offers consumers a wide array of e-commerce services as well. In terms of scale, the company caters to approximately 220 million customers weekly.
While all of this is great, could WMT stock have more room to run as a result? If anything, the company does not seem to be slowing down anytime soon. According to a recent post on its careers page, Walmart is hiring a “digital currency and cryptocurrency product lead”. In particular, the company is looking for someone who can provide leadership in identifying tech and customer trends. Given all the hype around digital currencies this year, this could be a timely move by Walmart. This would be the case as some of the biggest names in the fintech space are already adopting cryptocurrencies.
Not to mention, the company is also looking to invest almost $1 billion over the next five years towards employee training. The current plan includes paying for 100% of college tuition fees for Walmart associates, enabling them to upskill and earn degrees. Amidst the current labor market shortage, this would be a bold play to attract more potential employees. Overall, with Walmart set to report its earnings before tomorrow’s opening bell, will you be keeping an eye on WMT stock?
Source: TD Ameritrade TOS
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Costco Wholesale Corporation
Following that, we have the Costco Wholesale Corporation. In brief, the Washington-based company is a big-box store operator. For the most part, Costco manages a chain of membership-only big-box retail stores. The like of which offer consumers everyday groceries in large quantities. By Costco’s estimates, it currently boasts a network of over 800 warehouses across the U.S., U.K., and Canada among others. In theory, should coronavirus fears continue to rise among consumers, Costco’s offerings would be in demand.
Likewise, investors appear keen on COST stock as well. The company’s shares are up by over 25% in the past six months and continue trading towards newer heights. The real question now is, can it keep up its current momentum? For starters, we could take a look at its recent sales report. Earlier this month, the company reported solid sales figures for July. Notably, it raked in net sales of $176.3 billion for the month, marking a sizable 17.8% year-over-year increase. Specifically, Costco posted an impressive 48.9% increase in its e-commerce comparable sales over the same time as well.
While its retail peers report earnings this week, Costco has yet to reveal the date of its fiscal 2021 fourth-quarter fiscal. For some perspective, we could look towards its latest quarter fiscal posted back in May. In it, the company saw green across the board. It saw year-over-year increases of 45% in both net income and earnings per share for the quarter. Given all of this, would you consider COST stock a top buy in the stock market now?
Source: TD Ameritrade TOS
[Read More] 4 Artificial Intelligence Stocks To Watch Right Now
Target Inc.
Similar to our first entry, Target is also slated to report its latest quarter fiscal this week. With the company looking to do so before Wednesday’s opening bell, should investors be watching TGT stock now? Well, as another one of the major names in the retail space today, some would argue that Target would be a viable bet among retailers. In essence, the company caters to customers through its portfolio of over 1,900 stores nationwide.
Evidently, Target remains a go-to for consumers and investors alike this year. In its latest quarter fiscal posted back in May, the company posted stellar figures. Notably, it brought in a total revenue of $24.20 billion for the quarter, a 23% year-over-year increase. Moreover, Target also reported a massive year-over-year surge of 638% in net income. CEO Brian Cornell had this to say, “We’re confident in continued comp growth in the second quarter and through the remainder of the year, as well as a healthy full-year operating margin rate.” At the same time, TGT stock is looking at gains of over 180% since its pandemic era low.
By and large, Target appears to be kicking into high gear right now. So much so that the company even recently increased its quarterly dividend by a whopping 32%. CFO Michael Fiddelke cited “strong operating performance and cash generation” as core factors for this move. Would all of this make TGT stock worth investing in for you?
Source: TD Ameritrade TOS
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Best Retail Stocks To Buy [Or Sell] Today Walmart Inc. (NYSE: WMT) Costco Wholesale Corporation (NASDAQ: COST) Target Inc. (NYSE: TGT) Walmart Inc. To begin with, we will be taking a look at Walmart. 4 To Know Costco Wholesale Corporation Following that, we have the Costco Wholesale Corporation. For the most part, Costco manages a chain of membership-only big-box retail stores. | Best Retail Stocks To Buy [Or Sell] Today Walmart Inc. (NYSE: WMT) Costco Wholesale Corporation (NASDAQ: COST) Target Inc. (NYSE: TGT) Walmart Inc. To begin with, we will be taking a look at Walmart. 4 To Know Costco Wholesale Corporation Following that, we have the Costco Wholesale Corporation. For the most part, Costco manages a chain of membership-only big-box retail stores. | Best Retail Stocks To Buy [Or Sell] Today Walmart Inc. (NYSE: WMT) Costco Wholesale Corporation (NASDAQ: COST) Target Inc. (NYSE: TGT) Walmart Inc. To begin with, we will be taking a look at Walmart. 4 To Know Costco Wholesale Corporation Following that, we have the Costco Wholesale Corporation. For the most part, Costco manages a chain of membership-only big-box retail stores. | Best Retail Stocks To Buy [Or Sell] Today Walmart Inc. (NYSE: WMT) Costco Wholesale Corporation (NASDAQ: COST) Target Inc. (NYSE: TGT) Walmart Inc. To begin with, we will be taking a look at Walmart. 4 To Know Costco Wholesale Corporation Following that, we have the Costco Wholesale Corporation. For the most part, Costco manages a chain of membership-only big-box retail stores. | null |
14,052 | 626,260 | 2021-08-13 00:00:00 UTC | 3 No-Brainer Stocks to Consider if You're Worried About Inflation | COST | https://www.nasdaq.com/articles/3-no-brainer-stocks-to-consider-if-youre-worried-about-inflation-2021-08-13 | null | null | As the world slowly opens back up and the economic engine starts roaring again, worries about rising inflation are on investors' minds. The best course of action is to position your portfolio so that increasing costs have minimal, or no, effect on your stocks at all.
This manifests itself in pricing power, something investing great Warren Buffett thinks is the best attribute any business can have. Read on to learn about three no-brainer stocks you should consider if you're seriously concerned about inflation.
Image source: Getty Images.
1. Chipotle Mexican Grill
The trailblazer of the fast-casual movement, Chipotle Mexican Grill (NYSE: CMG), is a leading restaurant stock, with shares up 60% over the last year. This is not a fluke. The company consistently offers its customers more value than what they pay for, which clearly rewards shareholders.
In June, Chipotle raised its average hourly rate for store employees to $15 an hour, and subsequently hiked menu prices by up to 4%. The business also cited higher industry-wide ingredient costs as another reason for the price increases. And so far, customers have had no complaints.
"Let's see how the menu price continues to be accepted by customers, so far, really, really good, really seeing no resistance whatsoever," CFO Jack Hartung mentioned on the earnings call when replying to an analyst question. This should come as a surprise to no one. For $7.75, I can get a chicken burrito bowl that I know will satisfy my hunger better than more expensive meals offered by fast food and fast-casual competitors.
Chipotle delivers customers a screaming value. That gives the business pricing power, thereby supporting it against inflation.
2. Costco Wholesale
You're probably wondering how a company so intensely focused on maintaining low prices makes the list. It's Costco Wholesale's (NASDAQ: COST) valuable memberships that are the real star, giving the warehouse retailer a powerful lever to pull during inflationary times.
Costco currently charges $60 per year for its Gold Star Everyday Value membership. That's a small price to pay in order to gain access to a wide selection of low price items. And the pandemic only bolstered Costco's exceptional value proposition.
Earlier this year, Costco announced that starting wages in the U.S. will jump to $16 an hour, making this an opportune time to hike annual membership fees. The last two times fees went up were in 2011 and 2017, so it could realistically happen within the next year or so.
But still, the number of memberships have increased unaffected over time. Costco has 60.6 million member households today, up from 48.6 million four years earlier. The warehouse club operator has only become more central to consumers' lives over the past 18 months, further boosting its ability to lift prices and protect against inflation.
3. Netflix
With the ability to spend massive amounts on content to the tune of $17 billion this year, Netflix (NASDAQ: NFLX) benefits as the first mover in a now crowded streaming ecosystem. But this is exactly why it's a solid addition to your portfolio if you're worried about inflation.
For just $13.99 a month (U.S. standard plan), I instantly gain access to a content catalog worth $27.3 billion. Sure, the monthly fee is higher than many other streaming services, but Netflix has one of the best libraries around, attracting Oscar nominations like it's nobody's business.
The constant focus on product improvement and user experience is why management has no issue increasing prices. "Then we have the ability to go back and occasionally ask some of those members to pay a little bit more to keep that virtuous cycle going," Chief Product Officer Greg Peters said when discussing Netflix's value to consumers.
Netflix is notorious for frequent price increases, the most recent happening last October. But members understand and appreciate what they're getting in return. In the first quarter of this year, engagement and churn actually improved from the prior-year period, highlighting no adverse effect from the higher bill.
Chipotle, Costco, and Netflix are all companies that arguably give customers more value than the prices they ask. If you're worried that the inflation we're seeing in the economy is here to stay, then you should seriously consider buying these three stocks.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Chipotle Mexican Grill, Costco Wholesale, and Netflix. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | It's Costco Wholesale's (NASDAQ: COST) valuable memberships that are the real star, giving the warehouse retailer a powerful lever to pull during inflationary times. The best course of action is to position your portfolio so that increasing costs have minimal, or no, effect on your stocks at all. The business also cited higher industry-wide ingredient costs as another reason for the price increases. | It's Costco Wholesale's (NASDAQ: COST) valuable memberships that are the real star, giving the warehouse retailer a powerful lever to pull during inflationary times. The Motley Fool owns shares of and recommends Chipotle Mexican Grill, Costco Wholesale, and Netflix. The best course of action is to position your portfolio so that increasing costs have minimal, or no, effect on your stocks at all. | Chipotle, Costco, and Netflix are all companies that arguably give customers more value than the prices they ask. The best course of action is to position your portfolio so that increasing costs have minimal, or no, effect on your stocks at all. The business also cited higher industry-wide ingredient costs as another reason for the price increases. | Earlier this year, Costco announced that starting wages in the U.S. will jump to $16 an hour, making this an opportune time to hike annual membership fees. The Motley Fool owns shares of and recommends Chipotle Mexican Grill, Costco Wholesale, and Netflix. The best course of action is to position your portfolio so that increasing costs have minimal, or no, effect on your stocks at all. | null |
14,053 | 626,262 | 2021-08-10 00:00:00 UTC | 2 Retail Stocks You Can Buy and Hold for the Next Decade | COST | https://www.nasdaq.com/articles/2-retail-stocks-you-can-buy-and-hold-for-the-next-decade-2021-08-10 | null | null | While it may seem like time flies by, a decade is a long period. Think about all the changes that have occurred in your own life and the larger world -- some for good and others not. Since 2011, the economy emerged from the Great Recession and began expanding. Then, COVID-19 struck, dealing devastating effects to people's health and the economy.
While few could have predicted a global pandemic, retailers that fail to adapt to a changing climate or consumer preferences run into trouble. There have been well-known and once popular retailers such as Sears Holdings, J.C. Penney, Neiman Marcus, and Toys R Us that have filed bankruptcy in recent years.
The industry continues to undergo a dramatic transformation as more people shop online, and the threat of Amazon (NASDAQ: AMZN) hangs over participants. Fortunately, you can find retailers that continue to confront whatever comes their way through simple businesses and strong execution.
With these two stocks, you can remain confident that they will likely not only survive but thrive in the next 10 years, no matter what comes their way.
Image source: Getty Images.
1. Costco
Costco (NASDAQ: COST) is known for selling oversized quantities in its large warehouses. But the experience is much more. The company offers high-quality merchandise and services to members at attractive prices. The approach continues to retain and attract members, who don't seem to mind paying an annual fee for the right to access Costco warehouses.
Its renewal rate continues to hover around 90% while also continually adding new members. Costco ended last year with 58.1 million paying members, up from 47.6 million in fiscal 2016. The company's year ends around the end of August. By the end of the third quarter, the number grew to 60.6 million.
But Costco isn't merely adding members without regard for the bottom line. Its fiscal 2020 diluted earnings per share were $9.02, 69% higher than fiscal 2016's figure. This year was more of the same, with earnings coming in at $7.51 a diluted share for the first nine months compared to last year's $5.89.
While there's no guarantee the company will keep paying them, Costco has gotten into the habit of declaring large special dividends every two to three years. The last one was in December when it paid $10.
Its dividend yield is 0.7%, which is lower than the S&P 500's 1.3%, but this doesn't count the special payments. Additionally, Costco has raised its payouts annually since its first dividend in 2004. This includes boosting May's payment by 13% to $0.79.
2. Walmart
Walmart (NYSE: WMT) has a well-earned reputation for charging low prices. In fact, competitors find it difficult to undercut what the company charges for items. That's because the mantra of keeping costs down to pass these savings along to customers is ingrained in its culture. After all, it opened its first discount store almost 60 years ago.
Add in that Walmart is constantly innovating, opened its first e-commerce site more than 20 years ago, and continues to push innovation that focuses on customer convenience and faster delivery. Last year, in a move to counter Amazon, it launched Walmart+. This is its subscription program, which includes shipping, gasoline discounts, and a faster checkout process at the stores.
Management expects to spend $14 billion on capital expenditures this year, a 40% increase, focusing on items like the supply chains, automation, and customer-facing initiatives. This should allow Walmart to not only remain relevant in the coming years, but to compete with online rivals.
It is also keeping an eye on profits while looking toward the future. Last year's adjusted operating income rose by over 9% to $23.4 billion. This year, management expects a high-single-digit percentage increase, revising its estimate from its prior flattish expectation.
In terms of dividends, the board of directors has increased them annually since its first payment in 1974, making Walmart a Dividend Aristocrat. The company modestly increased dividends this year by a penny to $0.55 a quarter. The dividend yield is 1.5%. It is good to know that Walmart is investing in the future while continuing to raise dividends.
Retail is a competitive business, but Costco and Walmart have positioned themselves well to continue succeeding by focusing on their customers' wants and needs. It is a simple concept that will continue to reward shareholders over the next decade.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Costco Wholesale. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The approach continues to retain and attract members, who don't seem to mind paying an annual fee for the right to access Costco warehouses. Costco Costco (NASDAQ: COST) is known for selling oversized quantities in its large warehouses. Costco ended last year with 58.1 million paying members, up from 47.6 million in fiscal 2016. | Costco Costco (NASDAQ: COST) is known for selling oversized quantities in its large warehouses. Costco ended last year with 58.1 million paying members, up from 47.6 million in fiscal 2016. The approach continues to retain and attract members, who don't seem to mind paying an annual fee for the right to access Costco warehouses. | Costco ended last year with 58.1 million paying members, up from 47.6 million in fiscal 2016. Costco Costco (NASDAQ: COST) is known for selling oversized quantities in its large warehouses. The approach continues to retain and attract members, who don't seem to mind paying an annual fee for the right to access Costco warehouses. | The Motley Fool owns shares of and recommends Amazon and Costco Wholesale. Costco Costco (NASDAQ: COST) is known for selling oversized quantities in its large warehouses. The approach continues to retain and attract members, who don't seem to mind paying an annual fee for the right to access Costco warehouses. | null |
14,054 | 626,263 | 2021-08-09 00:00:00 UTC | Best Consumer Discretionary Stocks To Buy Now? 5 For Your List | COST | https://www.nasdaq.com/articles/best-consumer-discretionary-stocks-to-buy-now-5-for-your-list-2021-08-09 | null | null | 5 Hot Consumer Discretionary Stocks For Your Late 2021 Watchlist
With the increased focus on pandemic conditions, investors appear to be rotating out of reopening stocks. After considering this, could the consumer discretionary section of the stock market still be worth investing in now? Well, for one thing, not all consumer discretionary stocks are made equal in the market today. This would be the case as some parts of the industry would see increased demand should pandemic conditions continue to worsen. With all that in mind, the focus of our article today will be stay-at-home consumer discretionary stocks.
To begin, this would encompass digital means of entertainment that are mostly contactless. This includes streaming stocks such as FuboTV (NYSE: FUBO) and video game stocks like Skillz (NYSE: SKLZ) among others. Moreover, companies like Best Buy (NYSE: BBY) would also see increased consumer traffic online. In theory, we could see home improvement trends continue to persist should coronavirus cases continue to rise. Regarding the current state of the world, experts do not appear to be optimistic. Namely, leading epidemiologist Larry Brilliant said over the weekend that the “pandemic is not coming to an end soon”. While this remains to be seen, consumer discretionary businesses would continue to thrive as global demands remain strong. With that said, could one of these consumer discretionary stocks be worth watching in the stock market today?
5 Top Consumer Discretionary Stocks To Watch This Month
DraftKings Inc. (NASDAQ: DKNG)
Home Depot Inc. (NYSE: HD)
ContextLogic Inc. (NASDAQ: WISH)
Penn National Gaming Inc. (NASDAQ: PENN)
Costco Wholesale Corporation (NASDAQ: COST)
DraftKings Inc.
DraftKings is a daily fantasy sports contest and sports betting operator. In essence, it is a digital sports entertainment and gaming company that boasts a wide range of products across daily fantasy, digital media, and regulated gaming. The company is a vertically integrated sports betting operator that is based in the U.S. It also has operations in over 7 countries with 15 distinct sports categories. DraftKings is also the official daily fantasy partner of the NFL, MLB, and NASCAR among others. DKNG stock currently trades at $52.84 as of 3:30 p.m. ET.
Today, the company announced that it will acquire Golden Nugget Online Gaming (NASDAQ: GNOG) in an all-stock transaction that has an implied equity value of approximately $1.56 billion. The acquisition will enable DraftKings to utilize Golden Nugget’s iGaming product experience and well-known brand. It will also enhance the company’s ability to instantly reach a broader consumer base, including Golden Nugget’s loyal iGaming-first customers. The company also says that the deal will create meaningful synergies such as increased combined company revenues driven by additional cross-sell opportunities and loyalty integrations. With that being said, will you add DKNG stock to your watchlist?
Source: TD Ameritrade TOS
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Home Depot Inc.
Home Depot is the world’s largest home improvement specialty retailer, with over 2,000 retail stores in all 50 states. In fiscal 2020, the company had sales of $132.1 billion and earnings of $12.9 billion. It also employs approximately 500,000 associates. HD stock currently trades at $328.95 as of 3:31 p.m. ET. The company will be announcing its second-quarterearnings conference callon August 17, 2021.
In light of that, how has the company been doing financially? In May, the company announced stellar first-quarter results. Notably, its total sales for the quarter were $37.5 billion, a 32.7% increase year-over-year. Net earnings for the quarter were $4.1 billion, or $3.86 per diluted earnings. “Fiscal 2021 is off to a strong start as we continue to build on the momentum from our strategic investments and effectively manage the unprecedented demand for home improvement projects,” said Craig Menear, chairman, and CEO. Given this piece of news, is HD stock a top consumer discretionary stock to consider watching right now?
Source: TD Ameritrade TOS
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ContextLogic Inc.
ContextLogic or Wish is a consumer discretionary company that brings an entertaining shopping experience to millions of consumers around the world. In fact, it is one of the largest global e-commerce platforms in the world, connecting millions of value-conscious consumers in over 100 countries to over half a million merchants globally. WISH stock currently trades at $10.48 as of 3:31 p.m. ET.
Last month, the company announced that it has been granted a Payment Services License by the Dutch Central Bank. The new license will enable Wish to process transactions and increase control over the payments value chain in a compliant manner, while also reducing reliance on third parties. The granting of this license would be the company’s first step towards becoming a payment services provider in Europe. Lastly, the company will also be announcing its second-quarter 2021 results on August 12, 2021, after the market closes. All things considered, is WISH stock worth adding to your list right now?
Source: TD Ameritrade TOS
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Penn National Gaming Inc.
Another name to consider in the consumer discretionary space now would be Penn National Gaming (PENN). Sure, if you had told me this a few years back, I would not have believed you. However, the company’s successful shift towards the online betting industry has and continues to benefit PENN. By the company’s estimates, it currently boasts the “largest and most diversified” regional gaming portfolio in the U.S. With over 24 million members across its entertainment offerings, could PENN stock be worth keeping an eye on now?
As it stands, PENN stock currently trades at $71.58 as of 3:31 p.m. ET. More importantly, the company’s shares are sitting on gains of over 800% since its pandemic era low. Despite its momentum, PENN does not seem to be slowing down anytime soon. As of last week, the company is planning to acquire “theScore”, a leading digital media and sports betting tech firm. Through the $2 billion deal, PENN is looking to create a best-in-class one-stop destination for online sports betting fans nationwide. Would all of this make PENN stock a top buy for you now?
Source: TD Ameritrade TOS
[Read more] Top Stocks To Buy Now? 5 Dividend Stocks To Watch
Costco Wholesale Corporation
Last but not least, we have Costco. In brief, it is a multinational corporation that operates a chain of big-box retail stores. Through a paid membership, consumers can access Costco’s massive array of offerings. The likes of which range from groceries and clothing to electronics and even furniture. In particular, consumers looking to stock up amidst the current coronavirus fears would be turning to Costco. After all, the company’s wholesale business model would facilitate such shopping trends.
Now, COST stock is trading at $439.98 a share as of 3:32 p.m. ET. Notably, the company’s shares continue to trade towards newer heights. Could this trend continue? If anything, Costco appears to be kicking into high gear on the operational front. In its July sales update, the company reported a 48.9% year-over-year increase in overall e-commerce comparable sales. This would be a notable feat given its massive network of over 800 warehouses worldwide. By and large, would this make COST stock worth investing in for you?
Source: TD Ameritrade TOS
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 5 Top Consumer Discretionary Stocks To Watch This Month DraftKings Inc. (NASDAQ: DKNG) Home Depot Inc. (NYSE: HD) ContextLogic Inc. (NASDAQ: WISH) Penn National Gaming Inc. (NASDAQ: PENN) Costco Wholesale Corporation (NASDAQ: COST) DraftKings Inc. DraftKings is a daily fantasy sports contest and sports betting operator. 5 Dividend Stocks To Watch Costco Wholesale Corporation Last but not least, we have Costco. Through a paid membership, consumers can access Costco’s massive array of offerings. | 5 Top Consumer Discretionary Stocks To Watch This Month DraftKings Inc. (NASDAQ: DKNG) Home Depot Inc. (NYSE: HD) ContextLogic Inc. (NASDAQ: WISH) Penn National Gaming Inc. (NASDAQ: PENN) Costco Wholesale Corporation (NASDAQ: COST) DraftKings Inc. DraftKings is a daily fantasy sports contest and sports betting operator. 5 Dividend Stocks To Watch Costco Wholesale Corporation Last but not least, we have Costco. Through a paid membership, consumers can access Costco’s massive array of offerings. | 5 Top Consumer Discretionary Stocks To Watch This Month DraftKings Inc. (NASDAQ: DKNG) Home Depot Inc. (NYSE: HD) ContextLogic Inc. (NASDAQ: WISH) Penn National Gaming Inc. (NASDAQ: PENN) Costco Wholesale Corporation (NASDAQ: COST) DraftKings Inc. DraftKings is a daily fantasy sports contest and sports betting operator. 5 Dividend Stocks To Watch Costco Wholesale Corporation Last but not least, we have Costco. Through a paid membership, consumers can access Costco’s massive array of offerings. | 5 Top Consumer Discretionary Stocks To Watch This Month DraftKings Inc. (NASDAQ: DKNG) Home Depot Inc. (NYSE: HD) ContextLogic Inc. (NASDAQ: WISH) Penn National Gaming Inc. (NASDAQ: PENN) Costco Wholesale Corporation (NASDAQ: COST) DraftKings Inc. DraftKings is a daily fantasy sports contest and sports betting operator. 5 Dividend Stocks To Watch Costco Wholesale Corporation Last but not least, we have Costco. Through a paid membership, consumers can access Costco’s massive array of offerings. | null |
14,055 | 626,264 | 2021-08-08 00:00:00 UTC | 7 REITs I Own and Never Plan to Sell | COST | https://www.nasdaq.com/articles/7-reits-i-own-and-never-plan-to-sell-2021-08-08 | null | null | I'm known around The Motley Fool as "The REIT Guy" by many of my colleagues and readers, so it shouldn't come as much of a surprise that my own stock portfolio is full of REITs, or real estate investment trusts. In this Fool Live video clip, recorded on July 16, I discuss my largest REIT positions with my colleague Brian Withers and our chief growth officer Anand Chokkavelu, and why I love each one for the long term.
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Matt Frankel: I'm the real estate guy, so not surprisingly, my biggest category is real estate investment trusts, or REITs. I have seven of them in my top 20. They are Digital Realty Trust (NYSE: DLR), STORE Capital (NYSE: STOR), Empire State Realty Trust (NYSE: ESRT), Healthpeak Properties (NYSE: PEAK), Tanger Outlets (NYSE: SKT), Realty Income (NYSE: O), and Ryman Hospitality Properties (NYSE: RHP). If you haven't heard of any of those or don't know what they do, you're probably not alone. This is where Brian and my investing styles differ. Most of his stocks needed no explanation. Everyone knew what they were.
What does these do? Just two-sentence explanations of each ones. Empire State Realty, this is my largest stock position by dollars. It's a little bit more than, I think, 7% of my portfolio right now, a little bit more than that. They own the Empire State Building, they own some other office real estate in the Manhattan and surrounding areas. One big differentiator, other than the fact that they own such an iconic property, is that they also operate the famous observatory on top of the Empire State Building, which is still a must-do tourist attraction in New York City. That's an absolute cash machine. In normal times, they make about 25% of their income from that, even though it makes up something like 3% of their square footage. Cash machine business. Most office REITs don't have anything comparable in their portfolio.
Realty Income, they are the first realty I ever bought. They own over 6,500 freestanding properties, mostly leased to non-discretionary retailers. Think of companies like Walgreens, that's, I think, their biggest tenant. They own a lot of Dollar Store properties, wholesale clubs like BJ's and Costco and things like that. They own those kind of properties, freestanding meaning one tenant. They have a great track record of performance. Does the slideshow look better now?
Anand Chokkavelu: It does.
Frankel: Awesome. Sorry, Tim. Anyway, Realty Income. There we go. They have a great track record of performance. They've been a public company since 1994. Since that time, they have delivered annualized returns greater than 15% a year, which is an excellent track record over 27 years. They're a Dividend Mristocrat. They actually have a trademark on the term "the monthly dividend company," which a lot of people don't realize. That is there if you talked about the monthly dividend company, that is Realty Income. Great performance, great income. Digital Realty data center. This is the only one that Brian said he might buy.
Brian Withers: I do own Square.
Frankel: Okay. Well, out of the REITs. I call them a different kind of tech stock. They own the actual properties that house the servers and networking equipment that Brian's stocks rely on pretty much. Great way to play that to real estate, Tanger Outlets. If you live in a coastal area, you've probably seen a Tanger Outlets property. I know there's one close to Anand in the National Harbor.
Chokkavelu: Yeah.
Frankel: Yeah, they're the biggest stand-alone outlet shopping company. Simon Property Group (NYSE: SPG) is the leader in the space, Tanger is the biggest one that only focused on outlets. I'll make the slide deck available to whoever wants it, by the way. Store Capital, very similar business to Realty Income. Newer, it got on my radar because it's the only read that Warren Buffett invest in through Berkshire Hathaway. Healthpeak properties. Healthcare is a great growth trend long term. They invest in life science properties and medical offices and a smaller concentration in senior housing. Great growth market. The healthcare industry is just going to explode over the next few decades.
Finally, and then I'll shut up and see what these guys think about them, Ryman Hospitality Properties. It's probably my favorite hotel company in the world. They own five massive hotels all under the Gaylord brand name. If you're a national person, you know of the Ryman Auditorium where the company gets its name, the Grand Ole Opry, and the Ole Red restaurant chain that was opened in partnership with Blake Shelton. They own that as well. Not a total real estate play there, actually, they have a restaurant business and the Gaylord, I believe the full actually had an event at the Gaylord at one point.
Chokkavelu: Yes.
Withers: They did.
Frankel: What are your thoughts on all of these? Are these really "OK boomer" stocks or are they appropriate retirement investments?
Withers: I guess, when I looked at the financials for these, they operate very differently than my tech stocks and software stocks. They are buying infrastructure, whether it's land, property, building buildings, various places along. Then they use those assets and those physical buildings to then make money. One of the things that I look at as I look at companies, is I want them to be more virtual. Companies with more distribution centers or manufacturing centers or have to have retail outlets to capture revenue are not things that I'm interested in, and that's exactly how these guys make money, right? They have buildings and that's how they make money. But the Digital Realty one is one that piqued my interest very much and it ranked pretty high on my scores as well.
Anand Chokkavelu, CFA owns shares of Berkshire Hathaway (B shares) and Square. Brian Withers owns shares of Digital Realty Trust and Square. Matthew Frankel, CFP owns shares of Berkshire Hathaway (B shares), Digital Realty Trust, Empire State Realty Trust, Healthpeak Properties, Inc., Realty Income, Ryman Hospitality Properties, STORE Capital, Square, and Tanger Factory Outlet Centers. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Costco Wholesale, Digital Realty Trust, and Square. The Motley Fool recommends Empire State Realty Trust, Healthpeak Properties, Inc., Ryman Hospitality Properties, STORE Capital, and Tanger Factory Outlet Centers and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | They own a lot of Dollar Store properties, wholesale clubs like BJ's and Costco and things like that. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Costco Wholesale, Digital Realty Trust, and Square. In this Fool Live video clip, recorded on July 16, I discuss my largest REIT positions with my colleague Brian Withers and our chief growth officer Anand Chokkavelu, and why I love each one for the long term. | They own a lot of Dollar Store properties, wholesale clubs like BJ's and Costco and things like that. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Costco Wholesale, Digital Realty Trust, and Square. They are Digital Realty Trust (NYSE: DLR), STORE Capital (NYSE: STOR), Empire State Realty Trust (NYSE: ESRT), Healthpeak Properties (NYSE: PEAK), Tanger Outlets (NYSE: SKT), Realty Income (NYSE: O), and Ryman Hospitality Properties (NYSE: RHP). | They own a lot of Dollar Store properties, wholesale clubs like BJ's and Costco and things like that. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Costco Wholesale, Digital Realty Trust, and Square. They are Digital Realty Trust (NYSE: DLR), STORE Capital (NYSE: STOR), Empire State Realty Trust (NYSE: ESRT), Healthpeak Properties (NYSE: PEAK), Tanger Outlets (NYSE: SKT), Realty Income (NYSE: O), and Ryman Hospitality Properties (NYSE: RHP). | They own a lot of Dollar Store properties, wholesale clubs like BJ's and Costco and things like that. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Costco Wholesale, Digital Realty Trust, and Square. In this Fool Live video clip, recorded on July 16, I discuss my largest REIT positions with my colleague Brian Withers and our chief growth officer Anand Chokkavelu, and why I love each one for the long term. | null |
14,056 | 626,265 | 2021-08-06 00:00:00 UTC | Notable Friday Option Activity: COST, ETSY, JPM | COST | https://www.nasdaq.com/articles/notable-friday-option-activity%3A-cost-etsy-jpm-2021-08-06 | null | null | Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Costco Wholesale Corp (Symbol: COST), where a total volume of 21,349 contracts has been traded thus far today, a contract volume which is representative of approximately 2.1 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 128.5% of COST's average daily trading volume over the past month, of 1.7 million shares. Especially high volume was seen for the $440 strike call option expiring August 06, 2021, with 3,253 contracts trading so far today, representing approximately 325,300 underlying shares of COST. Below is a chart showing COST's trailing twelve month trading history, with the $440 strike highlighted in orange:
Etsy Inc (Symbol: ETSY) options are showing a volume of 36,615 contracts thus far today. That number of contracts represents approximately 3.7 million underlying shares, working out to a sizeable 121.6% of ETSY's average daily trading volume over the past month, of 3.0 million shares. Particularly high volume was seen for the $185 strike call option expiring August 06, 2021, with 2,173 contracts trading so far today, representing approximately 217,300 underlying shares of ETSY. Below is a chart showing ETSY's trailing twelve month trading history, with the $185 strike highlighted in orange:
And JPMorgan Chase & Co (Symbol: JPM) saw options trading volume of 129,484 contracts, representing approximately 12.9 million underlying shares or approximately 102.2% of JPM's average daily trading volume over the past month, of 12.7 million shares. Particularly high volume was seen for the $157.50 strike call option expiring August 06, 2021, with 17,860 contracts trading so far today, representing approximately 1.8 million underlying shares of JPM. Below is a chart showing JPM's trailing twelve month trading history, with the $157.50 strike highlighted in orange:
For the various different available expirations for COST options, ETSY options, or JPM options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Especially high volume was seen for the $440 strike call option expiring August 06, 2021, with 3,253 contracts trading so far today, representing approximately 325,300 underlying shares of COST. Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Costco Wholesale Corp (Symbol: COST), where a total volume of 21,349 contracts has been traded thus far today, a contract volume which is representative of approximately 2.1 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 128.5% of COST's average daily trading volume over the past month, of 1.7 million shares. | Below is a chart showing COST's trailing twelve month trading history, with the $440 strike highlighted in orange: Etsy Inc (Symbol: ETSY) options are showing a volume of 36,615 contracts thus far today. Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Costco Wholesale Corp (Symbol: COST), where a total volume of 21,349 contracts has been traded thus far today, a contract volume which is representative of approximately 2.1 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 128.5% of COST's average daily trading volume over the past month, of 1.7 million shares. | Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Costco Wholesale Corp (Symbol: COST), where a total volume of 21,349 contracts has been traded thus far today, a contract volume which is representative of approximately 2.1 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 128.5% of COST's average daily trading volume over the past month, of 1.7 million shares. Especially high volume was seen for the $440 strike call option expiring August 06, 2021, with 3,253 contracts trading so far today, representing approximately 325,300 underlying shares of COST. | Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Costco Wholesale Corp (Symbol: COST), where a total volume of 21,349 contracts has been traded thus far today, a contract volume which is representative of approximately 2.1 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 128.5% of COST's average daily trading volume over the past month, of 1.7 million shares. Especially high volume was seen for the $440 strike call option expiring August 06, 2021, with 3,253 contracts trading so far today, representing approximately 325,300 underlying shares of COST. | null |
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