Free Trial

7 Oversold Stocks That Could Be Setting Up for a Rally - 5 of 7

 
 

#5 - Costco (NASDAQ:COST)

Another one of the year’s best-performing stocks is also offering a buy-the-dip opportunity. Costco Wholesale Corporation (NASDAQ: COST) recently announced that it would raise its membership fees for the first time in about eight years. The new rates will take effect on September 1, 2024. 

This looks like a case where investors bought the rumor and sold the news. COST stock surged to a 52-week high prior to the announcement, and now it is down about 4% in the last month. That’s not a huge dip to buy, and there won’t be a lot of news from the company until it reports earnings in late September.  

At that time, investors will likely get their first hint at how well members tolerate the new rate. However, historically, the company has had a retention rate of over 90% when it has increased its rates. The revenue the company earns from these price increases goes straight to the bottom line, which should promote a second-half surge.  

About Costco Wholesale

Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, Mexico, Japan, the United Kingdom, Korea, Australia, Taiwan, China, Spain, France, Iceland, New Zealand, and Sweden. The company offers branded and private-label products in a range of merchandise categories. Read More 
Current Price
$898.29
Consensus Rating
Moderate Buy
Ratings Breakdown
18 Buy Ratings, 9 Hold Ratings, 0 Sell Ratings.
Consensus Price Target
$881.19 (1.9% Downside)

 

Kamala’s tax plan is worse than you think—find out why (Ad)

Buffett's been eerily quiet about his reasons, but his actions speak volumes. When someone with his track record starts pulling out of the market, it's time to pay attention.

Get your FREE, no-obligation Wealth Protection Guide now