PreMarket Prep Stock Of The Day: Costco Wholesale

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

The week ended with earnings reports from a few companies in the retail industry. One of the retailers that reported, Costco Wholesale Corporation COST, is the PreMarket Prep Stock of the Day.

Costco Bottomed In February, Not In March: After ending 2019 at $283.92, Coscto sprinted to new all-time-high in February at $315.25, but exhibited weakness along with the broad market in late February.

While the S&P 500 index did not find a bottom until March 23, Costco bottomed on Feb. 28 at $261.28.

That marked the lowest level for the issue since it bottomed in August 2018 at $252.72.

Costco became a "stay-at-home" stock as the coronavirus pandemic took hold this year. 

Costco's Relentless Rally: Costco was higher in eight of the nine months following its February low, with the one outlier being a decline of just over $5 in June ($298.47 to $293.21).

The issue did make it all-time-high this month at $388.07, but is now trading below its November close of $381.77.

Costco Rewarding Shareholders: After the close Nov. 16, Costco declared a special $10-per-share special cash dividend, for a payout of $4.4 billion funded by existing cash. 

All shareholders as of Dec. 2 were eligible for the dividend, and it was payable Dec. 11. 

Interestingly, the issue peaked at $388.07 and made an all-time closing high price ($387.56), the day prior to the eligibility date, as investors piled into the issue to get the special dividend.

Yet depending on when one bought the shares, they may be in the red, as the issue has shed over $10 based on its price ($375) in Friday's session — and Friday being the payout date. 

Costco's Q1 Beat: After the close Thursday, the company announced a first-quarter EPS beat of 24 cents and a sales beat of $790 million.

Costco has beat for EPS in seven of the last eight quarters, but has not been so consistent on the sales side.

Costco reported same-store sales up 15.4% year-over-year and e-commerce sales that were up 86% year-over-year.

The company had a renewal rate of 90.9% for the quarter.

Costco Price Action During The Show: When the issue was being covered during the show Friday, it was trading at the $374 area. Co-host Dennis Dick did not expect to see a lot of upside in the issue or Lululemon Athletica LULU, which also posted an EPS and sales beat. 

“All the good news has been factored into Costco — how can it get any better for them, unless the vaccine fails?” Dick said. 

Costco Price Action During The Regular Session: As it turns out, Costco's much higher opening print of $379.77 Friday has turned out to be the exact high for the session.

Since that elevated open, it has drifted lower, but has yet to reach Thursday’s low ($371.56), as $372.54 stands as the low for the session.

Costco shares were trading up 0.71% at $375.43 ahead of the close Friday. 

The full discussion on the issue from Friday's show can be found here: