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Costco (COST, $467.75) beat fiscal Q4 expectations; will limit purchases owing to supply chain issues
Costco reported its fiscal fourth quarter earnings that surpassed analysts’ expectations. However, the big-box retail giant said that it would begin limiting purchases of certain essential items amid supply chain challenges.
Costco's earning in the quarter came in at $3.76 per share, up +23.7% year-over-year, and beating analysts’ expectations of $3.58 per share. Gross margins, however, fell -32 basis points to 10.9% owing to rising supply chain costs amid COVID-19 pandemic.
Revenue rose +17% from the year-ago quarter to $62.68 billion, compared to analysts’ estimates of $61.4 billion.
Comparable sales rose by a higher-than-expected +9.4%. Membership fees increased +11.7% to $1.234 billion, and total members topped 61.7 million.
During the earnings call, Costco Chief Financial Officer Richard Galanti said the retailer is “putting some [purchase] limitations on key items.” The items include toilet paper, paper towels, bottled water and high-demand cleaning products. But Galanti did not specify how many of each item customers will be allowed to purchase. The limitations are being placed due to shipping delays and truck driver shortages.
Galanti mentioned that the company has chartered three ocean vessels for the next year to transport containers between Asia and the U.S. and Canada. Each ship has the capacity to carry 800 to 1,000 containers at a time, he said.
COST's RSI Oscillator climbs out of oversold territory
The RSI Oscillator for COST moved out of oversold territory on May 25, 2022. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 16 similar instances when the indicator left oversold territory. In 12 of the 16 cases the stock moved higher. This puts the odds of a move higher at 75%.
Current price $464.99 is below $493.81 the lowest support line found by A.I. Throughout the month of 04/26/22 - 05/26/22, the price experienced a -16% Downtrend, while the week of 05/19/22 - 05/26/22 shows a +10% Uptrend.
The Stochastic Indicator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 31 of 43 cases where COST's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 72%.
Following a +6.23% 3-day Advance, the price is estimated to grow further. Considering data from situations where COST advanced for three days, in 250 of 398 cases, the price rose further within the following month. The odds of a continued upward trend are 63%.
COST may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Momentum Indicator moved below the 0 level on April 22, 2022. You may want to consider selling the stock, shorting the stock, or exploring put options on COST as a result. In 28 of 90 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 31%.
COST moved below its 50-day Moving Average on April 29, 2022 date and that indicates a change from an upward trend to a downward trend.
The 10-day Moving Average for COST crossed bearishly below the 50-day moving average on May 04, 2022. This indicates that the trend has shifted lower and could be considered a sell signal. In 6 of 13 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 46%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where COST declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 37%.
The Aroon Indicator for COST entered a downward trend on May 26, 2022. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Tickeron has a negative outlook on this ticker and predicts a further decline by more than 4.00% within the next month with a likelihood of 48%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.78.
The Tickeron Profit vs. Risk Rating rating for this company is 12 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 57, placing this stock better than average.
The Tickeron SMR rating for this company is 20 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 30 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 60 (best 1 - 100 worst), indicating fairly steady price growth. COST’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 77 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (10.616) is normal, around the industry mean (66.580). COST has a moderately high P/E Ratio (37.453) as compared to the industry average of (23.448). COST's Projected Growth (PEG Ratio) (3.021) is slightly higher than the industry average of (2.182). Dividend Yield (0.007) settles around the average of (0.021) among similar stocks. P/S Ratio (0.983) is also within normal values, averaging (1.102).
Companies in the discount stores industry specialize in offering substantial discounts on a vast array of retail products. Some companies in this industry also operate general merchandise warehouse clubs. Products sold at discount stores are typically similar to those of any department store, but the pricing of the goods is generally much lower (and hence the name “discount”). Think Dollar General Corporation, Dollar Tree, Inc. and Five Below, Inc. Many discount stores target low-income households and/or price-sensitive consumers as their potential market. Discount stores’ profitability could hinge on factors like competitive pricing, sufficient locations, healthy revenue per square foot, and effective advertisement. These store operators could have an edge over other retailers during financial crises or recessions, when many consumers could be looking for less expensive alternatives.
The average market capitalization across the Discount Stores Industry is 47.7B. The market cap for tickers in the group ranges from 2.2M to 339.6B. WMT holds the highest valuation in this group at 339.6B. The lowest valued company is FRED at 2.2M.
The average weekly price growth across all stocks in the Discount Stores Industry was -0.24%. For the same Industry, the average monthly price growth was -15.02%, and the average quarterly price growth was -19.24%. OLLI experienced the highest price growth at 5.09%, while WMMVY experienced the biggest fall at -5.2%.
- 5/6/22 5:04 AM: Costco Wholesale (COST, $517.32) was a top loser this week, declining -7.95%
- 4/27/22 5:34 AM: Costco Wholesale (COST, $553.76) was a top loser this week, declining -6.82%
- 3/19/22 4:49 AM: Costco Wholesale (COST, $561.35) was a top weekly gainer, with a +6.43% jump
The average weekly volume growth across all stocks in the Discount Stores Industry was -73.59%. For the same stocks of the Industry, the average monthly volume growth was 65.29% and the average quarterly volume growth was 79.71%
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Stocks in the group have a Negative Outlook today, backed by the MA200MA50 Indicator. Tickeron has a negative outlook on this group and predicts a further decline by more than 4.00% within the next month with a likelihood of 48%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.46.
2 stocks in the group of tickers exhibit a similar negative trend based on the 15 indicator with an average likelihood of 79%.
The most notable companies in this group are Costco Wholesale Corp (NASDAQ:COST), Kohl's Corp (NYSE:KSS), Macy's (NYSE:M).
The average market capitalization across the group is 17.6B. The market cap for tickers in the group ranges from 132M to 206.1B. COST holds the highest valuation in this group at 206.1B. The lowest valued company is HDVTY at 132M.
The average weekly price growth across all stocks in the group was 0.96%. For the same group, the average monthly price growth was -9.02%, and the average quarterly price growth was -20.8%. GPOVF experienced the highest price growth at 20.31%, while DNLMY experienced the biggest fall at -23.05%.
- 5/20/22 5:28 AM: Lifestyle International Holdings (LFSYF, $0.51) was a top weekly gainer, with a +16.04% jump
- 5/6/22 5:04 AM: Costco Wholesale (COST, $517.32) was a top loser this week, declining -7.95%
- 5/6/22 5:04 AM: Macy's (M, $23.82) was a top loser this week, declining -7.42%. Expect a Downtrend reversal
The average weekly volume growth across all stocks in the group was 105.32%. For the same stocks of the group, the average monthly volume growth was 105.49% and the average quarterly volume growth was 99.75%
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
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