COSTCO A GO?!

Costco Wholesale Corporation, commonly known as Costco, is one of the largest retailers in the world. The company operates a chain of membership-only warehouse clubs, offering a wide range of products at discounted prices to its members. Costco has been a favorite of investors for decades, and its stock price has been one of the best-performing in the retail industry. In this blog post, we will explore the history of Costco's stock price and how it has responded to recessions. We will also discuss the views of prominent investors like Charlie Munger on Costco's stock.

History of Costco Stock

Costco was founded in 1983 by James Sinegal and Jeffrey Brotman. Since then, the company has grown into a retail giant with more than 800 stores in 12 countries. Costco's business model is based on low prices, high volume, and membership fees. The company offers a wide range of products, including groceries, electronics, clothing, and home appliances, at discounted prices to its members.

Costco's stock price has been on an upward trajectory since the company went public in 1985. The initial public offering (IPO) price was $10 per share, and the stock has since split several times. As of May 16, 2023, Costco's stock price is $490.67 per share, with a market capitalization of $216.2 billion.

Costco's stock price has been one of the best-performing in the retail industry. Over the past 10 years, the stock has delivered an average annual return of 21.4%. The company has a history of strong financial performance, with consistent revenue and earnings growth.

Costco's Response to Recessions

Costco's business model of offering discounted prices to its members has helped the company weather economic downturns. During the 2008 financial crisis, Costco's stock price initially declined with the broader market. However, the company's sales continued to grow, and its stock price recovered quickly. In fact, Costco's stock price doubled in the five years following the financial crisis.

Similarly, during the COVID-19 pandemic, Costco's stock price initially declined as investors worried about the impact of the pandemic on consumer spending. However, the company's sales grew, as consumers stocked up on essentials like groceries and household supplies. Costco's stock price quickly recovered and reached new highs.

Charlie Munger's View on Costco Stock

Charlie Munger, the vice chairman of Berkshire Hathaway and Warren Buffett's long-time business partner, is a big supporter of Costco. In an interview with CNBC in 2021, Munger praised the company's business model and management team. He said, "Costco is a business that's so good that they don't even have to advertise. And they have a huge share of the retail market. So, it's been a very good business, and I think it will continue to be a very good business."

Berkshire Hathaway has been a long-time investor in Costco. The company first bought Costco stock in 2000 and has since increased its stake in the company. As of the end of 2020, Berkshire Hathaway owned 4.3 million shares of Costco, worth about $1.2 billion.

Conclusion

Costco's stock price has been one of the best-performing in the retail industry, thanks to the company's business model of offering discounted prices to its members. The company has a history of strong