I don’t know about anyone else, but current price looks interesting to me and I plan to add some shares today. This is a company that’s been good to my accounts and my initial purchases were essentially me holding my nose a bit as it just never seemed to go “on sale”. It’s been a pretty steady performer.
About 15% below recent high water mark.
long and soon to be longer
I’m not sure Costco is all that attractive at these prices. I estimate that it would return about 4-8% per year from here over the next decade. It would have to continue to grow at a pretty good clip and be awarded a nice multiple in ten years to hit the higher end of the return expectation.
One thing that might allow it to reach that potential is continued international expansion.
I’m regretting not lightening up at $560.
PP
I don’t know about anyone else, but current price looks interesting to me and I plan to add some shares today. This is a company that’s been good to my accounts and my initial purchases were essentially me holding my nose a bit as it just never seemed to go “on sale”. It’s been a pretty steady performer.
COST did go on sale back in March 2021 (it was discussed on the Falling Knives board) - and I managed to jump in build up a smallish position. The current price doesn’t look all that attractive. When I purchased TTM revenue was around $178B and the market cap was around $135B for a multiple of 0.75x Today TTM revenue should come in around $225B, but the market cap is $218B for a multiple of 0.96.
At these levels I would call the stock “fair, to slightly high”; certainly not a bargain. A bargain price would probably be in the $400 range.
tecmo
…
I’m regretting not lightening up at $560.
I didn’t get the high - but did sell about 25% of my position back in November…
https://discussion.fool.com/lightning-up-34979854.aspx
tecmo
…
“I didn’t get the high - but did sell about 25% of my position back in November…”
Good job having the discipline to lighten up. It did get in the $560-570 range the last week of December.
Appreciate the comments. It seemed like a fair price for a great company, so I added. Frankly, if it ever revisited $400 I’d likely back up the truck (the grain truck, not my Honda).
Let’s chat again in a few years (or as it approaches $400). 
I don’t know the firm in great depth, so take this with a grain of salt.
Fabulous firm, and it’s never cheap. No argument…premium goods for premium prices. Makes sense.
But I’m not sure I follow the reasoning which suggests the recent drop brings it to a reasonable level for Costco compared to Costco’s own history.
Fabulous firm, but it still seems to be a lot more expensive than its own history, no?
Perhaps some people simply accept that everything is twice as expensive as it was prior to five years ago and that’s normal now.
And perhaps they’re right. But perhaps not?
Their earnings are a steadily rising juggernaut. Not only does that make for a nice investment, it makes a nice first-approximation yardstick of value.
A trailing multiple of about 23 was typical in the few years prior to the credit crunch.
A trailing multiple of about 25 was typical around 2011-2014.
A trailing multiple of about 28 was typical around 2015-2018.
A multiple around 35 became normal in the stretch mid 2019 to mid 2020. Earnings weren’t depressed.
And now we’re around 43 down from a recent high around 48.
It’s worth a premium, but is it worth twice what it used to be?
Not arguing. Just wondering if someone who knows the firm better can explain the thinking.
Jim
And now we’re around [PE] 43 down from a recent high around 48.
Yeah, when I took a quick look at sales, earnings and growth today I took a pass. Great company, no doubt, but seems pricey for the amount of growth you might expect going forward. Of course if they can keep up ~15-20% growth for long enough it will end up looking good, but I don’t want to pay that much up front for that level of growth.
Remember we could’ve picked up Apple, Walmart and MSFT @ c12x Earnings not that many years ago… What short memories we have, or is it different this time? 
Remember we could’ve picked up Apple, Walmart and MSFT @ c12x Earnings not that many years ago…
What short memories we have, or is it different this time?
Or Intel right now.
Trailing 9.8, forward 14 because they’re expected to have a bad year.
They’re not going anywhere.
I suspect that reaching twice the current price ($53.62) probably won’t take many years.
2.6% dividend in the mean time.
“Cash flow” yield is around 14%, give or take. One of the best balance sheets out there.
Is there anything bad you can say about their near term business prospects? Sure.
As there is about any firm, at any time.
As there was about Apple, Walmart, and Microsoft during the stretches you mention.
Sometimes they’re right, but sometimes the worries are overblown a tad.
Jim
I had some Intel.years ago and sold out after a 30-40% gain (can’t remember when)
You have to watch the cyclical earnings.
https://www.macrotrends.net/stocks/charts/INTC/intel/eps-ear…
Currently at another peak?
Shhhh, not done accumulating.
mungo: Or Intel right now.
Currently ranked number 2 on my slightly modified version of mungo’s ROE_Cash screen.
I’m in.
RAM
Hi Jim,
I was over on the Mechanical Investing board and saw this post about Intel. Come to find out, when I went searching for it, this post is in response to your post about Intel over there. I’m not sure you have seen it yet.
I read the linked article (good read) as it has a good history but also lays out the challenges that Intel needs to overcome in abandoning their legacy ways of doing things. This is happening now, with the new CEO contracting with TSMC to build their new gen processors which forces the design team to standardize on current standard design software that is unlike Intel’s proprietary “cobbled together” software design libraries. I hope I’m clear in that when I mention design software it is the software that Intel designers use to design processor components and stitch them together on a wafer.
https://discussion.fool.com/interesting-recent-take-on-intel-nam…
'38Packard
Or Intel right now.
Trailing 9.8, forward 14 because they’re expected to have a bad year.
Ben Thompson, over at his terrific Stratechery blog, had some reasonably nice things to say about Intel a couple of days ago:
“[CEO] Gelsinger was once thought to be next-in-line to be Intel’s CEO; he literally walked out the door in 2009 and for a decade Intel floundered under business types who couldn’t have dreamed of building the 486 or the tools that made it possible; now he has come back home, and is doing what must be done if Intel is to be both a great design company and a great manufacturing company: split them up.”