Recently we took a detailed look at the Top 10 Trending Stocks and Costco Wholesale Corporation (NASDAQ: COST) was one of the stocks that were highlighted in that article.
The volatile tariff policies of the new US administration and a slowdown in AI-related enthusiasm took a toll on the market over the past few weeks. However, some analysts believe a rebound is due.
Fundstrat’s Tom Lee said in a latest program on CNBC that he believes the US stock market will begin to recover starting April 2. Here is how Lee explained the reasons behind his positive outlook:
“When markets fall this quickly from a 52-week high, just remember less than a month ago we were at all-time highs. That is a market pricing in a crisis. I’d say almost 50% pricing in a recession, and we’re assuming there’s no Fed put now. The Fed is in a position to cut rates that really should mitigate the downside. I do think two other things that investors have to keep in mind, because many people just want to get out until April 2nd, is number one, I do think there’s a very high probability that a tariff solution happens before the next three weeks happens. It’s simple to see because China, Europe, Canada, Mexico since April 18th—all of those countries have outperformed the US. I don’t think that markets are that blind to say if Canada and Mexico are about to have a recession, they should outperform the US. The second thing people should keep in mind is that when you have a global crisis brewing—and we highlighted like the 1962 Cuban Missile Crisis—that was a 12-day crisis, but the markets bottomed seven days into the crisis, five days before that crisis ended, the market had already recovered two-thirds of the losses.”
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article, we picked 10 stocks notable Wall Street analysts were discussing recently. With each stock we have mentioned its latest hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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7. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Funds Investors: 75
Keith Fitz-Gerald from Fitz-Gerald Group said in a recent program on CNBC that he is bullish on Costco Wholesale Corporation (NASDAQ:COST).
“I think we’re going to see a good jump in comparable sales, and I think we’re going to see a very resilient membership—particularly now when people’s wallets are stretched and fear is running high. So, I’m looking forward to this report. It’s a stock that I cannot imagine not owning.”
Costco Wholesale Corp (NASDAQ:COST) latest quarterly report was mixed, with revenue beating estimates but earnings falling short of market expectations. The company’s comparable sales were up 8.3% in the US. Excluding gas prices and F/X swings, comparable sales were up 8.6% in the US, compared with a 6.5% growth estimate by the Street. Membership fee income was $1.19 billion vs $1.22 billion consensus and $1.11 billion a year ago.
Aoris Investment Management stated the following regarding Costco Wholesale Corporation (NASDAQ:COST) in its Q4 2024 investor letter:
“Firstly, I think we exercised good valuation discipline in our sales of Costco Wholesale Corporation (NASDAQ:COST) and Cintas. The share prices of these two companies had increased by more than 60% and 40% respectively in the year prior to our sale. It can be difficult as investors to remain objective and not ‘fall in love’ with an investment when it is performing well. A higher share price doesn’t make a business more valuable!
We sold both Costco and Cintas simply for reasons of valuation. These are exceptional businesses that we’d love to own again if valuation permits. Their sales allowed us to recycle portfolio capital into more attractively valued businesses.”
COST ranks 7th among our list of the top 10 trending stocks. While we acknowledge the potential of COST, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than COST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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