Costco Company Analysis

Costco Company Analysis 2023 With Alejandro Salcedo

Alejandro shares his Warren Buffett-style analysis of Costco, Charlie Munger’s favorite warehouse club!

Costco has been dominating the bulk warehouse goods market for a while, though BJ’s and Sam’s Club also have respectable performances.

Alejandro explained why Costco’s business model is so strong and why this type of company would fit Buffett and Munger-style investment criteria.

Costco’s moat or durable competitive advantage is its price moat where they only earn 11% margins but they offer the highest quality goods for the lowest prices to Costco members.

Many people trust Costco’s Kirkland store brand, though sometimes it is white labeling for prominent companies’ goods and services. For example, I’ve heard some Costcos offer Chevron gas though you may only see it labeled as Kirkland. Fuel may be sourced from various oil and gas companies.

He elaborated on how Costco is recession-proof, including a review of its sales figures, low debt, and financial statements.

Since 2020, Costco’s stock market performance (COST ticker symbol) has been strong. While Costco is a wonderful business, the stock may be trading at around 40 PE, which is a bit expensive.

Perhaps this is why Charlie Munger said at a recent Daily Journal meeting that he would not buy Costco at its current prices, but if you’re an institution or pension fund and plan to hold for 50 years then it might be OK.

I’m sure just as many of us wait for the best sales at Costco, I’m also waiting for its stock to go on sale!

We welcome audience thoughts and questions on the company we analyzed in this video, please feel free to comment in the video!

It was really kind of Alejandro to present his company analysis with me, so thank you my friend!

If you’re interested in learning how to take control of your finances and start becoming an investor like Warren Buffett, check out my free PDF guide.

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