Jim Cramer’s Costco Buy Call: Are Institutions Beating Retail Investors to the Punch?

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By: Christian Pierce

Costco Wholesale Corporation, COST
COST Stock Card

Retail investors are stuck debating the right entry point for Costco stock. Jim Cramer told a Mad Money caller to buy partial shares now. He advised waiting for a deeper dip to lock in better value. Big institutional investors aren’t waiting around, though.

Costco stock opened at $968.59 on Wednesday. It was down 0.6% that trading day. It sits well below its 52-week high of $1,096.50. Motley Fool Asset Management raised its stake by 20.8% in Q4. It added 10,429 units for a total of 60,650. Brighton Jones lifted its position by 12.3% in Q4. Revolve Wealth Partners added 13.1% to its stake. Institutional investors now own 68.48% of the company. Last quarter, Costco reported $70.53 billion in revenue. That beat analyst estimates. EPS hit $4.93, missing the consensus by one cent. The company raised its quarterly dividend to $1.47 per share. That gives a 0.6% annual yield. Digital sales jumped 21% last quarter. Gasoline volumes hit a record high. The stock fell 5% after the earnings report. Analysts hold an average “Moderate Buy” rating. Their average price target is $1,060.41.

The stock trades at a high P/E ratio of around 48.72. Steady operational wins and institutional confidence make it a solid long-term hold. Don’t commit all your capital at once. Wait for a small pullback to lock in better value.

Author bio: Christian Pierce, a chief financial columnist and markets commentator with 15+ years covering public equities and retail sector trends.