In this article, we discuss 5 stocks Ray Dalio and insiders are piling into. If you want to see more stocks in this selection, check out 10 Stocks Ray Dalio and Insiders Are Piling Into.
5. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 64
Securities filings for the third quarter of 2022 reveal that Ray Dalio owns roughly 1.2 million shares of Costco Wholesale Corporation (NASDAQ:COST), worth $566.5 million and representing 2.86% of his total holdings. On June 7, a director at Costco Wholesale Corporation (NASDAQ:COST) reported purchasing 850 shares of the company priced at $470.74 each.
On November 7, Wells Fargo analyst Edward Kelly downgraded Costco Wholesale Corporation (NASDAQ:COST) to Equal Weight from Overweight, slashing the price target to $490 from $600. The analyst sees a “number of hurdles” in the company’s path and called Costco Wholesale Corporation (NASDAQ:COST) a “rich multiple stock.” He sees more risk to consensus estimates than potential upside moving forward.
According to Insider Monkey’s data, 64 hedge funds were long Costco Wholesale Corporation (NASDAQ:COST) at the end of Q2 2022, compared to 61 funds in the last quarter. Ken Fisher’s Fisher Asset Management held the leading stake in the company, consisting of 4.3 million shares worth $2 billion.
Here is what Cooper Investors Global Equities Fund has to say about Costco Wholesale Corporation (NASDAQ:COST) in its Q3 2022 investor letter:
“The US economy continues to run hot – the labor market is extremely tight and a number of executives we spoke to described their challenges in retaining staff and preventing competitors from poaching talent. Industrial companies in particular continue to see record backlogs, with the easing of logistics and supply chain constraints only just starting to have an impact on deliveries and lead times.
In terms of inflationary pressures, the vast majority of our holdings have been able to leverage strong market positions and stakeholder relationships to push pricing through in 2022 such that minimal impact to earnings has occurred. Clearly this is not a lever that can be pulled indefinitely but the more experienced management teams have kept some of their powder dry. Our meeting with management at Costco in Seattle was memorable for several reasons but one was their latent ability to increase member pricing which they have not done in over 5 years (and thus likely to do in 2023)…
…To conclude we’ll return to our meeting with Costco mentioned earlier. The business quality is no secret after decades of incredible execution, but the meeting gave us renewed conviction around Value Latencies in terms of the runway for growth, the focus on enhancing customer value, Costco’s vast buying power (it purchases 30% of the world’s jumbo cashews as one example) and management’s feral focus on the business model and cost discipline.”
