Fast Money Blog- 9/27/24
This week on Wall Street was dominated by Costco’s Q4 earnings release and Visa’s alleged antitrust violations.
On Thursday, September 26th, Costco Wholesale Corporation (COST) released their Q4 2024 earnings report with solid top line revenue of $79.6 billion, up 1% year-over-year.
This increase was led by sales growth in non-food categories including appliances, health and beauty aids and toys.
Comparable sales in the fourth quarter were up 5.4% year -over-year, while traffic and shopping frequency increased 5.6% year over year in Q4.
Costco currently has a total of 132 million members and 71 million paid members.
Even better is that the company says that about half of new membership signups during fiscal year 2024 have come from people under the age of 40.
In other news, the company hiked its membership fees for the first time since 2017. The Gold Star membership will rise $5 to $65, while the Executive membership will go up $10 to $130.
Keep in mind that this price hike will be reflected in next quarter's results.
In my view Costco is extremely impressive for these reasons:
1.The residual income generated from membership fees is always on a steady increase.
2. The company is very data-driven and lets the consumer lead them.
3. They sell bulk items at a wholesale price.
4. They have a very consumer friendly return policy.
Wall Street insiders are still waiting for a 10 for 1 stock split as the stock price is in split territory.
I strongly recommend building a position in Costco stock. It’s a real winner.
In other Wall Street news of a controversial nature, On Tuesday, September 24th, Visa, Inc. (V) got hit with a civil antitrust lawsuit by the U.S. Justice Department.
Just So You Know
It’s important to note that Visa is the most dominant player in the credit card industry, processing about 60% of debit transactions in the U.S.
The government’s lawsuit alleges that Visa illegally maintains a monopoly over the debit network services market, by imposing agreements with major banks and merchants that require merchants to choose Visa’s network or pay higher fees to Visa for sales transactions.
I still think Visa is a great company and will survive this investigation, but the stock will remain range-bound for a while.
Some publicly traded companies don’t play fair and I think that in order to participate in the U.S. stock market, Visa will have to cooperate in some way with the U.S. government.
Next week I expect to see more exciting developments and as a valued member of the Wealth I community I will keep you posed.
As always, stay positive. There’s a lot of good news on the horizon.
Tyrone Jackson, The Wealthy Investor