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Why Costco Wholesale Corporation (COST)’s Shares Jumped on Thursday?

Costco Wholesale Corporation (NASDAQ:COST) shares have surged by more than 5% after the bulk goods store reported fiscal third quarter earnings of $1.24 per share versus estimates of $1.22 per share. Sales were $26.77 billion, up by 2.6% year-over-year, but $300 million below estimates. The strong dollar and changing gas prices had a poignant effect on comps as Costco’s comparable sales would have increased 3%, instead of the registered flat growth, if the dollar had remained leveled and gas prices didn’t change. Costco Wholesale Corporation (NASDAQ:COST) currently operates 705 warehouses, including 493 in the United States and its territories, and 212 outside of the U.S.

The good results will most likely surprise investors among hedge funds, since Costco Wholesale Corporation registered a slight increase in popularity among the funds tracked by Insider Monkey. Costco Wholesale Corporation (NASDAQ:COST) was in 43 hedge funds’ portfolios at the end of the first quarter of 2016, compared to 42 funds a quarter earlier. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Lowe’s Companies, Inc. (NYSE:LOW), Lockheed Martin Corporation (NYSE:LMT), and Union Pacific Corporation (NYSE:UNP) to gather more data points.

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In today’s marketplace there are plenty of formulas stock market investors can use to appraise their stock investments. A duo of the less known formulas are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the elite hedge fund managers can outclass their index-focused peers by a very impressive amount (see the details here).

According to Insider Monkey’s hedge fund database, Warren Buffett’s Berkshire Hathaway has the most valuable position in Costco Wholesale Corporation (NASDAQ:COST), worth close to $682.9 million, comprising 0.5% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which holds a $174.9 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions comprise Panayotis Takis Sparaggis’s Alkeon Capital Management, Richard Chilton’s Chilton Investment Company and Phill Gross and Robert Atchinson’s Adage Capital Management.

On the next page, we are going to take a look at several investors that added Costco Wholesale Corporation to their equity portfolios between January and March.

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