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Wal-Mart Stores, Inc. (WMT), Target Corporation (TGT), Costco Wholesale Corporation (COST): A Value Play, A Growth Play, And A Dud!

A dud!

However, Costco Wholesale Corporation (NASDAQ:COST) seems to be expanding at a sluggish pace. The company opened 16 new stores last year and its management plans to open 27 to 30 new stores in 2013. This rate seems pretty slow for a company with over 600 stores spread in North America, Asia, Australia, and Europe.

With such a diversified global presence, the company generates consistent cash flows. But, it’s this very geographical diversification that has been weighing down financial results. The strengthening Canadian and U.S. dollars have lowered revenue and earnings from Japan and European nations. For the recent quarter, Costco Wholesale Corporation (NASDAQ:COST) reported 6% sales growth in the U.S., while international sales rose by just 2%.

Wrap up

Since the U.S. dollar is expected to strengthen further, I don’t think investing in Costco Wholesale Corporation (NASDAQ:COST) would be a good idea. Sure, the company is planning to add store footage, but its management doesn’t seem to have a radical plan to offset inflationary pressures and reduce forex losses. However, Wal-Mart Stores, Inc. (NYSE:WMT) and Target Corporation (NYSE:TGT) appear to be good investments, and analysts estimate their annual EPS to grow by 9.04% and 11.87%, respectively, for the next five years.

The article A Value Play, A Growth Play, And A Dud! originally appeared on and is written by Piyush Arora.

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