I’m sure you’re well aware by now that online shopping has been established as the new norm.
Because of this transition, the majority of brick-and-mortar retailers have been forced to pack up shop, with the exception of a few survivors.
Costco (COST) is one of the few companies that seems to be unphased by this move into the world of e-commerce.
Contrarily, the wholesale club’s stock is up 50% since last year, with half of that growth within the past 5 months alone.
All in all, Costco has proven to be a suitable investment opportunity with the prospective for high yielding profits in the future.
As a potential investor, here’s why AND how you can take advantage of this easy money.
Much of Costco’s success is due to the fact that the company manages to maintain an impressive 90% retention rate for all of its members.
In addition to that percentage, the wholesale club continues to add new members on a regular basis. The number’s show that Costco’s membership base has grown at an annual rate of more than 5% and is expected to continue to do so.
Although these membership fees only account for about 2% of Costco’s total revenue, it contributes to 17% of the company’s total value.
Memberships are a direct reflection of Costco’s customer base and a driving factor for company sales.
But why?
It’s simple. A business needs customers to purchase items and turnaround profit; however, Costco is far from lacking in that department.
Despite the competition from online vendors, such as Amazon, Costco continues to gain momentum. Even so, the company directed attention to online sales, which consequently drove traffic up 7%.
Compared to other retailers who have been threatened by the competition posed by these e-commerce giants, Costco is expected to be one of the least affected in this pool.
Either way, if you’re still not convinced that Costco is a secure stock to add to your portfolio, then I urge you to look at the chart below…
You don’t have to be an expert at chart analysis to notice that the trajectory has been at a steady upward climb for the past 3-years straight.
Compare this behavior to the act of walking up a flight of stairs…
If you look closely, you’ll see that many of these resistance lines have gradually turned into support and so on.
Without getting into too much of the details, just know that these “steps” result in the high stock value that Costco sits at today.
The share price is approximately $100 more than it was at the start of this uptrend!
Shareholders who managed to hold onto this pick throughout this period were obviously rewarded for their patience, but don’t get discouraged if you happened to miss the train.
Costco’s trajectory is ramping up at more of an incline than ever before and there is no indication of it pulling back anytime soon.
Not only has Costco sustained its value in the midst of the move to online shopping, but it’s actually risen, ensuring the health of the company as a whole.
Just know that this is exactly the type of security you want to look for when browsing for potential stocks to invest in.
Wonderful! I think I will buy some.