Costco's Solid 3Q Results a Testament to Its Leading Competitive Edge; Shares Rich
Wide-moat Costco’s third-quarter results place the firm moderately ahead of our full-year estimates, and as such, we intend to increase our $173 fair value estimate by a low-single-digit percentage. While we haven’t wavered on our thinking that Costco has amassed a sustainable competitive edge (as supported by renewal rates which exceeded 90% in the U.S., up from 87% a year ago), shares trade more than 10% above our valuation, and we’d suggest investors await a more attractive risk/reward propos...Costco Wholesale and its subsidiaries are principally engaged in the operation of membership warehouses based on the concept of providing its members low prices on a selection of nationally branded and private-label products. The company's merchandise are: food and sundries, which include dry foods, packaged foods, and groceries, snack foods, candy, alcoholic and nonalcoholic beverages, and cleaning supplies; hardlines, which include appliances, electronics, health and beauty aids, hardware, and garden and patio; fresh food, which include meat, produce, deli, and bakery; softlines, which include apparel and small appliances; and ancillary, which include gas stations and pharmacy businesses.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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