Michael Burry’s Latest Warning on Bullwhip Effect and 5 Retail Stocks to Watch

3. Costco Wholesale Corporation (NASDAQ:COST)

Number of Hedge Fund Holders: 61  

Costco Wholesale Corporation (NASDAQ:COST) owns and runs membership warehouses. Wells Fargo analysts claim that the “membership trends have been excellent” for the company despite macro factors and general retail weakness. It also has the best overall renewal rates and the customers seem to be holding up well for the firm. The inventory position of the firm also seems “relatively good” and the management seems confident the firm can navigate the inflationary backdrop. 

On June 2, Jefferies analyst Corey Tarlowe maintained a Buy rating on Costco Wholesale Corporation (NASDAQ:COST) stock and increased the price target to $580 from $560, noting that data indicated the firm had an “opportunity to raise membership prices”. 

At the end of the first quarter of 2022, 61 hedge funds in the database of Insider Monkey held stakes worth $5.41 billion in Costco Wholesale Corporation (NASDAQ:COST), up from 57 in the preceding quarter worth $5.40 billion. 

In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Costco Wholesale Corporation (NASDAQ:COST) was one of them. Here is what the fund said:

“Portfolio gains were led by a diverse group of contributors. Also in consumer discretionary, Costco Wholesale Corporation (NASDAQ:COST), which operates a chain of membership-only big-box retail stores, continues to impress as it takes to share and becomes more relevant for the consumer even as the world opens up.”