Connective Capital Management LLC Raises Stock Position in Costco Wholesale Corporation $COST

Key Points

• Connective Capital Management significantly increased its Costco position by 1,790.1% in the second quarter, ending with 5,935 shares valued at approximately $5.55 million—4% of the fund’s portfolio.
• Analyst sentiment remains broadly positive: 22 analysts rate Costco a Buy, 12 a Hold and one a Sell, producing a “Moderate Buy” consensus and an average price target of $1,056.03.
• Costco traded at $918.91, with a market capitalization of about $407.5 billion and a high valuation of 46.22 times earnings. The company also pays a quarterly dividend of $1.47, while a director recently sold 885 shares.

Connective Capital Management LLC lifted its holdings in shares of Costco Wholesale Corporation (NASDAQ:COST - Free Report) by 1,790.1% in the second quarter, according to the company in its most recent filing with the Securities and Exchange Commission (SEC). The fund owned 5,935 shares of the retailer's stock after buying an additional 5,621 shares during the period. Costco Wholesale comprises 4.0% of Connective Capital Management LLC's holdings, making the stock its 10th largest position. Connective Capital Management LLC's holdings in Costco Wholesale were worth $5,552,000 as of its most recent SEC filing.

Several other hedge funds also recently modified their holdings of the stock. California State Teachers Retirement System grew its stake in Costco Wholesale by 91,744.7% in the second quarter. California State Teachers Retirement System now owns 631,103,610 shares of the retailer's stock valued at $590,378,494,000 after purchasing an additional 630,416,468 shares in the last quarter. Geode Capital Management LLC raised its stake in shares of Costco Wholesale by 0.3% during the 4th quarter. Geode Capital Management LLC now owns 10,388,519 shares of the retailer's stock worth $8,919,573,000 after purchasing an additional 26,690 shares in the last quarter. Bank of America Corp DE boosted its holdings in shares of Costco Wholesale by 11.5% in the 1st quarter. Bank of America Corp DE now owns 7,515,031 shares of the retailer's stock valued at $7,488,203,000 after buying an additional 773,651 shares during the last quarter. Diamant Asset Management Inc. boosted its holdings in shares of Costco Wholesale by 99,278.0% in the 1st quarter. Diamant Asset Management Inc. now owns 6,726,899 shares of the retailer's stock valued at $672,690,000 after buying an additional 6,720,130 shares during the last quarter. Finally, Corient Private Wealth LLC grew its stake in shares of Costco Wholesale by 838.9% in the fourth quarter. Corient Private Wealth LLC now owns 6,125,405 shares of the retailer's stock valued at $5,282,182,000 after buying an additional 5,472,968 shares in the last quarter. Institutional investors own 68.48% of the company's stock.

Wall Street Analysts Forecast Growth

COST has been the subject of several recent analyst reports. Weiss Ratings downgraded shares of Costco Wholesale from a "buy (b-)" rating to a "hold (c+)" rating in a research note on Wednesday, September 2nd. HC Wainwright restated a "buy" rating on shares of Costco Wholesale in a research note on Monday, June 1st. Sanford C. Bernstein set a $1,144.00 price objective on Costco Wholesale in a research report on Friday, September 4th. TD Cowen reiterated a "buy" rating and set a $1,175.00 target price on shares of Costco Wholesale in a research note on Wednesday, June 3rd. Finally, Roth Capital boosted their target price on Costco Wholesale from $769.00 to $781.00 and gave the stock a "sell" rating in a report on Friday, May 29th. Twenty-two investment analysts have rated the stock with a Buy rating, twelve have given a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat, Costco Wholesale presently has an average rating of "Moderate Buy" and a consensus target price of $1,056.03.

Costco Wholesale Trading Up 1.6%

COST stock opened at $918.91 on Tuesday. Costco Wholesale Corporation has a 52 week low of $844.06 and a 52 week high of $1,096.50. The company has a market capitalization of $407.52 billion, a PE ratio of 46.22, a price-to-earnings-growth ratio of 3.77 and a beta of 0.86. The company's 50-day simple moving average is $939.46 and its 200 day simple moving average is $973.86. The company has a debt-to-equity ratio of 0.17, a quick ratio of 0.61 and a current ratio of 1.07.

Costco Wholesale Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Friday, August 7th. Stockholders of record on Friday, July 24th were given a $1.47 dividend. This represents a $5.88 dividend on an annualized basis and a dividend yield of 0.6%. The ex-dividend date was Friday, July 24th. Costco Wholesale's payout ratio is presently 29.58%.

Insider Activity

In related news, Director Kenneth Denman sold 885 shares of the business's stock in a transaction that occurred on Tuesday, June 23rd. The stock was sold at an average price of $957.45, for a total value of $847,343.25. Following the completion of the sale, the director directly owned 4,779 shares in the company, valued at approximately $4,575,653.55. The trade was a 15.62% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is accessible through this link. Company insiders own 0.10% of the company's stock.

Costco Wholesale News Summary

Here are the key news stories impacting Costco Wholesale this week:

• Positive Sentiment: Dividend increase supports the investment case. Costco recently raised its dividend by 13%, reinforcing confidence in cash generation and adding to the appeal of the membership-based retailer, although the regular yield remains modest and special dividends can make the headline payout appear higher. Costco dividend article
• Positive Sentiment: Long-term business fundamentals remain a bullish backdrop. Analysts and commentators continue to point to Costco’s scale, limited product assortment, purchasing advantages and resilient same-store sales as reasons the stock could recover after trailing the S&P 500 and trading below its 52-week high. Fourth-quarter results, expected later this month, are the next major potential catalyst. Costco earnings preview
• Neutral Sentiment: Motor-oil pricing reflects supply pressures rather than a company-specific demand problem. Costco raised the price of a 10-quart case of Kirkland Signature full-synthetic motor oil to $57.99 and limited purchases to two cases per member per week. The changes follow higher crude-oil prices and supply disruptions linked to Middle East tensions and Saudi Arabia’s East-West pipeline closure. Higher prices may protect margins, but the restrictions could affect customer sentiment. Costco motor oil article
• Negative Sentiment: Rationing and sharply higher prices create reputational and traffic risks. Reports that Costco has also capped purchases of Mobil 1 oil—and that some motor-oil prices have risen substantially from last year—evoke earlier pandemic-era product shortages. While the merchandise is a small portion of revenue, frustrated members could view the move negatively or defer purchases. Costco motor oil rationing article
• Negative Sentiment: Valuation leaves limited room for disappointment. Costco trades at a premium earnings multiple, so investors may require strong sales, membership trends and profit guidance from the upcoming report to justify the valuation. Rising merchandise and operating costs could pressure margins if Costco cannot pass them through broadly. Costco stock performance article

Costco Wholesale Profile

Costco Wholesale Corporation operates membership-based warehouse clubs that offer a broad selection of merchandise at generally competitive prices. Its product range includes groceries, fresh foods, apparel, appliances, electronics, furniture, jewelry, hardware, and seasonal goods, along with private-label products sold under the Kirkland Signature brand.

The company also provides a variety of ancillary services, including gasoline stations, pharmacies, optical centers, hearing-aid centers, food courts, tire centers, and travel services.

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