Jim Cramer on Costco: "It's Time to Start Buying the Best Retailer on Earth"

Costco Wholesale Corporation (NASDAQ:COST) is one of the stocks Jim Cramer shared his take on. Cramer highlighted the stock’s return compared to the S&P over the last two decades. He stated:

“Costco’s stock got crushed today, down more than $27 for what I think is actually a pretty silly reason. Its membership increased in the quarter, but not as much as the market anticipated… It didn’t matter that the sales and earnings and same-store sales were all better than expected… The thing is, Costco’s membership fees went up big with no real attrition. And we’re beginning to see a lot of younger members, which is very important because my only real fear with Costco was an age out. Plus, the company was able to mitigate prices on tariff goods…

Past 20 years, Costco’s delivered an annualized return of almost 19% compared with 11% for the S&P 500. Given that nothing’s really changed in the company, even as the stock’s now selling for under 46 times earnings after this pullback, I think you know what? [Buy, buy, buy]. I think it’s cheap for Costco at $915, and well, let’s put it this way, it’s heck of a lot cheaper than it was at $1,078 back in February.

In retrospect, if you’re going to sell, wasn’t that the time to do it? But not us. We’re not going to sell the stock… Costco, always cheap to shop, never cheap to buy. If you can get the stock flat for the year and below its typical price-to-earnings multiple, I think that’s about as good a bargain as you’ll find in any of their stores. If you don’t own any Costco, it’s time to start buying the best retailer on earth.”

Costco Wholesale Corporation (NASDAQ:COST) operates membership-based warehouses providing a wide selection of branded and private-label goods, including groceries, appliances, apparel, and home essentials.

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Disclosure: None. This article is originally published at Insider Monkey.