On October 11, 2023, James Klauer, the Executive Vice President of Costco Wholesale Corp (COST, Financial), sold 1,500 shares of the company. This move is part of a trend for the insider, who over the past year has sold a total of 4,000 shares and made no purchases.
Costco Wholesale Corp is a multinational corporation that operates a chain of membership-only warehouse clubs. As of 2023, Costco was the fifth largest retailer in the world, and the world's largest retailer of choice and prime beef, organic foods, rotisserie chicken, and wine. The company's business model is to generate high sales volumes and rapid inventory turnover by offering a limited assortment of merchandise at low prices.
The insider's recent transaction history and the company's stock performance are closely linked. Over the past year, there have been 16 insider sells and no insider buys for Costco Wholesale Corp. This trend is illustrated in the following image:
On the day of the insider's recent sell, shares of Costco Wholesale Corp were trading for $562.01 each, giving the company a market cap of $249.61 billion. The stock's price-earnings ratio was 39.81, significantly higher than the industry median of 16.89 and the company's historical median price-earnings ratio.
According to the GuruFocus Value, which is an intrinsic value estimate based on historical multiples, a GuruFocus adjustment factor, and future business performance estimates from Morningstar analysts, Costco Wholesale Corp is fairly valued. The stock's price-to-GF-Value ratio is 1.02, with a price of $562.01 and a GuruFocus Value of $552.22. The GF Value is illustrated in the following image:
The insider's recent sell of 1,500 shares is a notable move, especially considering the lack of insider buys over the past year. Investors should keep a close eye on the insider's future transactions and the company's stock performance. While the stock is currently fairly valued according to the GuruFocus Value, the high price-earnings ratio and the insider's selling trend could be cause for caution.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
