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[wispfox]

ladytabitha finds _such_ strange things... Dudley's dungeon (a webcomic)

conuly links to (and posts, because it's a NYTimes article) an article about Costco not being evil. I'm impressed! (even if Wall Street analysts aren't)

Oh! Also. "They've become the most violent and jittery people on earth"

Comments

[fourgates.livejournal.com]

Costco's stock (http://moneycentral.msn.com/investor/invsub/results/hilite.asp?Symbol=US%3aCOST) has done just about as well as the S&P500 index (usually a useful proxy for the whole economy) for the last one and three years. At five years it beats the S&P500 index nicely. Those analysts may be whining because the increase in the company's net profitability for the last quarter (vs. the same quarter the year earlier) was 2%, compared to the previous 5 quarters averaging over 20%. Fourteen of seventeen analysts tracking the stock rate it a Hold, though the consensus for earnings growth is between 10% and 12% for the next year. I note also that their price:earnings ratio (a measure of how expensive the company is if viewed as a cash-producing machine) is above where it was at this time last year, indicating that the market as a whole is feeling a bit better about their growth prospects (assuming that P/E ratios for the whole market are generally declining as profitability has increased in the "quiet recovery"). I think the analysts are neutral to negative not because Costco's story is bad (predictable 10% growth for a $51 billion company is no joke), but because it isn't comparatively great. There is also a weird trend where analysts' recommendations trail actual performance; they can't recommend something that just got them burned, even if the story going forward is much more positive. Two quarters from now it could look very different.