Front Street Capital Management Inc. Makes New Investment in Costco Wholesale Corporation $COST

Key Points

• Front Street Capital Management initiated a Costco position in the second quarter, purchasing 16,076 shares valued at approximately $15.0 million. Costco now represents about 1.7% of the firm’s portfolio, while institutional investors collectively own 68.48% of the stock.
• Costco shares opened at $915.74, below their 50-day and 200-day moving averages, while the company paid a quarterly dividend of $1.47, equivalent to a 0.6% annual yield.
• Analyst sentiment remains favorable, with a “Moderate Buy” consensus and an average price target of $1,056.90, but valuation concerns persist given Costco’s high earnings multiple and potential regulatory scrutiny related to a DOJ beef-pricing inquiry.

Front Street Capital Management Inc. acquired a new stake in Costco Wholesale Corporation (NASDAQ:COST - Free Report) during the 2nd quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor acquired 16,076 shares of the retailer's stock, valued at approximately $15,039,000. Costco Wholesale accounts for about 1.7% of Front Street Capital Management Inc.'s investment portfolio, making the stock its 21st biggest position.

A number of other hedge funds also recently modified their holdings of the stock. Brighton Jones LLC lifted its holdings in Costco Wholesale by 12.3% during the 4th quarter. Brighton Jones LLC now owns 19,825 shares of the retailer's stock worth $18,165,000 after purchasing an additional 2,172 shares during the last quarter. Revolve Wealth Partners LLC grew its holdings in Costco Wholesale by 13.1% in the 4th quarter. Revolve Wealth Partners LLC now owns 1,123 shares of the retailer's stock valued at $1,029,000 after buying an additional 130 shares in the last quarter. Sivia Capital Partners LLC grew its holdings in Costco Wholesale by 4.5% in the 2nd quarter. Sivia Capital Partners LLC now owns 3,853 shares of the retailer's stock valued at $3,814,000 after buying an additional 165 shares in the last quarter. Pinnacle Wealth Planning Services Inc. increased its position in Costco Wholesale by 1.1% during the 2nd quarter. Pinnacle Wealth Planning Services Inc. now owns 2,110 shares of the retailer's stock worth $2,089,000 after buying an additional 23 shares during the period. Finally, Schnieders Capital Management LLC. lifted its holdings in shares of Costco Wholesale by 2.2% during the second quarter. Schnieders Capital Management LLC. now owns 8,502 shares of the retailer's stock worth $8,416,000 after buying an additional 182 shares in the last quarter. Institutional investors and hedge funds own 68.48% of the company's stock.

Costco Wholesale Trading Down 1.0%

Shares of Costco Wholesale stock opened at $915.74 on Friday. The company has a quick ratio of 0.61, a current ratio of 1.07 and a debt-to-equity ratio of 0.17. Costco Wholesale Corporation has a 12-month low of $844.06 and a 12-month high of $1,096.50. The company has a market capitalization of $406.11 billion, a price-to-earnings ratio of 46.06, a PEG ratio of 3.84 and a beta of 0.86. The firm's 50-day moving average price is $943.58 and its two-hundred day moving average price is $977.75.

Costco Wholesale Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Friday, August 7th. Investors of record on Friday, July 24th were paid a $1.47 dividend. This represents a $5.88 dividend on an annualized basis and a yield of 0.6%. The ex-dividend date of this dividend was Friday, July 24th. Costco Wholesale's dividend payout ratio (DPR) is 29.58%.

Insider Transactions at Costco Wholesale

In other Costco Wholesale news, Director Kenneth Denman sold 885 shares of the business's stock in a transaction that occurred on Tuesday, June 23rd. The shares were sold at an average price of $957.45, for a total transaction of $847,343.25. Following the completion of the transaction, the director directly owned 4,779 shares in the company, valued at $4,575,653.55. The trade was a 15.62% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 0.10% of the stock is owned by company insiders.

Wall Street Analysts Forecast Growth

A number of equities research analysts have recently issued reports on COST shares. Deutsche Bank Aktiengesellschaft reissued a "buy" rating and issued a $1,091.00 target price on shares of Costco Wholesale in a research report on Friday. Roth Capital lifted their price objective on shares of Costco Wholesale from $769.00 to $781.00 and gave the stock a "sell" rating in a research note on Friday, May 29th. Guggenheim restated a "neutral" rating on shares of Costco Wholesale in a research report on Monday, June 1st. DA Davidson reaffirmed a "neutral" rating and set a $1,000.00 target price on shares of Costco Wholesale in a report on Thursday. Finally, The Goldman Sachs Group lifted their price target on shares of Costco Wholesale from $1,088.00 to $1,159.00 and gave the company a "buy" rating in a research report on Friday, May 29th. Twenty-one equities research 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. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and an average target price of $1,056.90.

Costco Wholesale News Summary

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

• Positive Sentiment: Strong August sales: Net sales increased 9.9% year over year, with comparable sales rising across regions and digitally enabled sales advancing 17.9%. The figures point to resilient member demand and continued e-commerce momentum. Costco's August Sales Rise 9.9% as Digital Growth Stays Strong
• Positive Sentiment: Analyst support remains broad: BTIG reiterated a Buy rating with a $1,125 target, while Bank of America maintained its Buy rating and $1,200 target. Analysts cited resilient core performance, market-share gains, and higher earnings estimates. BTIG Reaffirms Buy on Costco
• Positive Sentiment: Long-term shareholder appeal: Commentary highlighted Costco’s consistent dividend growth since 2004, membership model, customer loyalty, and potential for continued earnings expansion.
• Neutral Sentiment: Store expansion: Costco is reportedly considering a new location in Thompson’s Station, Tennessee, supporting its long-term warehouse growth strategy, although the potential site has no immediate earnings impact.
• Neutral Sentiment: Mixed analyst valuation signals: DA Davidson reaffirmed a Neutral rating with a $1,000 target, while Bernstein retained a Buy rating but lowered its target to $1,144, indicating less room for upside despite confidence in the business.
• Negative Sentiment: Valuation concerns: Jim Cramer and other commentators argued that COST trades at roughly 43–49 times earnings, leaving the stock vulnerable if growth slows or results merely meet expectations. Cramer Says Costco at 49 Times Earnings Is the Mistake Loyal Shoppers Keep Making
• Negative Sentiment: Regulatory risk: The Department of Justice expanded a beef-pricing antitrust inquiry to Costco, seeking information on prices, costs, margins, purchasing, and supply-chain practices. Potential compliance costs or scrutiny could pressure sentiment. US DOJ Widens Beef Price Inquiry
• Negative Sentiment: Costco Next shutdown: The company’s online marketplace reportedly went offline without notice, raising questions about its digital strategy, although the platform is not viewed as central to Costco’s core business. Costco Next Online Marketplace Shut Down

Costco Wholesale Profile

Costco Wholesale Corporation operates a global chain of membership-only warehouse clubs that sell a wide array of merchandise in bulk at discounted prices. The company's product mix includes groceries, fresh and frozen food, household goods, electronics, apparel, and seasonal items, augmented by its prominent private-label brand, Kirkland Signature. Costco's business model centers on annual membership fees and high-volume, low-margin sales, designed to drive repeat purchasing and strong customer loyalty among both consumers and small-business buyers.

Beyond merchandise, Costco provides a range of ancillary services that complement its warehouses, including gasoline stations, pharmacy and optical services, hearing aid centers, photo services, and travel and insurance products.

Want to see what other hedge funds are holding COST? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Costco Wholesale Corporation (NASDAQ:COST - Free Report).

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