One of the favourite picks for long term investors, COSTCO has delivered significant returns of 42% YTD and 200% post pandemic. In the long run I am bullish on COSTCO. Its membership model, growth prospects, cost management and the value it offers  to the members is nothing short of extraordinary! 

But in the short term, few things have me puzzled. 

The forward PE ratio of 52, is near all time high. In the past 3 months the stock momentum has been more sideways and can see a lot of insiders selling. 

On the contrary Walmart has reflected a strong outlook for the holiday season, Target has been losing market share to the likes of Walmart & Costco. The possibility of a stock split in the near future is also probable considering its reaching the 1000$ mark.

However, at $930 and current PE index of 55, for me it seems expensive and slightly overvalued but I can understand why some investors are willing to  pay this premium to own this quality stock. 

Thanks for reading, let me know your thoughts 🙂