Good article about Costco in Barron's. While I love Costco, the stock's price has gotten ahead of itself.
Not that I would sell, but the price has really popped up lately. Goes to show, there is always a difference between the price of an equity and its value. Fundamentally, Costco is doing great. That doesn't mean the market isn’t getting ahead of itself though.
The beauty of Costco is that they provide great service and value for their customers, they have exceptional employees, and they take care of their shareholders. Like all things in life, balance is very important.
Their prices and return policy is unmatched. Costco doesn't stick it to their customers and employees to squeeze out better margins. Wall Street used to criticize this practice. I sure am glad that Jim Sinegal ignored them.
Their employees are very well-paid for the retail industry. Some of the recent tax cut was used to increase the pay of their employees. Now that’s a unique idea!
Their shareholders have received nice special dividends over the years. Yippee!
Striking a balance between customers’, employees’ and shareholders’ interests, in my view, makes for a great company. I think it is funny that this elephant is hiding in full view, but others don't try to emulate it. This concept is similar to the same formula that Sam Walton applied to Walmart in their spectacular growth years.
If the golden goose lays golden eggs, nurture it! I would much rather have a golden egg a day for many years than a single meal of goose.
