We recently published 5 Stocks That Were On Jim Cramer’s Radar As He Discussed AI. Costco Wholesale Corporation (NASDAQ:COST) is one of the stocks Jim Cramer recently discussed.
Costco Wholesale Corporation (NASDAQ:COST) continues to be one of Cramer’s top stocks. Throughout the year, he has praised the firm’s intent to secure low prices for consumers. This time, he discussed Costco Wholesale Corporation (NASDAQ:COST)’s fiscal fourth quarter earnings, which saw the firm’s $86.16 billion in revenue and $5.87 in EPS beat analyst estimates of $86.06 billion and $5.80. The earnings were followed by a share price dip, and here is what Cramer said:
“Okay so this is a stock that we’ve owned for the Charitable Trust for I don’t know, since we started. And, I have become schooled in this company to know that anytime it goes below 50 times earnings, that’s when you buy it. I’ve been telling the club members, look, go down, the actual numbers were fine. Some people thought it was better than expected. There’s just a little bit delta which is that they didn’t have the signups that we would like. This stock has a history of literally going huge up and then resting and then having a decline and then being ready to go again. As it goes below that key multiple level. Charlie Munger always said, Costco’s always expensive but it’s the best. And the late Munger was a fantastic investor. Here we are. Below 50 times earnings. It’s time. It’s time to buy. Now David, the chart’s horrible, okay, and I know that that’s something periodically you’re focused on. But it can go below 900. I mean certainly that’s within the realm. But everything is great at Costco. And I do my checks at Costco. And I gotta tell you, this was just a remarkable quarter, but people wanted more. And I think they also were very candid. That they said, listen the tariffs are hurting us. We’re doing our best to keep the costs down. So therefore people feel like going forward the margins could be hurt. I have tremendous faith in this team. This is one again, this is one of the longest term, greatest owning stocks ever. And I’m not backing away. But I did say yesterday, don’t buy it ahead cause it’s still above 50 times earnings, well here we are. I told people to buy Boeing instead. . .It was 52 times earnings yesterday.
“But it’s always been rich. You have to accept that. You come to the nuisance of that being rich. Let it come down. You can get it at 49, 48 times earnings. That is about as cheap as it’s going to get. David, it’s not Palantir, it’s no Palantir, but I do think that their business model is great, they save you a lot of money, the card’s terrific. And I think that the management team is every bit as good as bit’s always been. Do I miss Richard Galanti who was the CFO for so many, 38 years, of course I do, everybody does, but I am very confident that this is business as usual at Costco and if you read the conference call you will know exactly that.”
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Disclosure: None. This article is originally published at Insider Monkey.
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