Key Takeaways COST grew FY25 EPS and sales estimates by 11.6% and 8.1%, supported by strong brand loyalty and execution.Kirkland Signature outpaced overall sales, with penetration up 50 bps, boosting brand-driven resilience.COST shares rallied 18.8% in a year, outpacing rivals despite trading at a premium P/E of 48.15.At a time when volatility continues to haunt, Costco Wholesale Corporation (COST) remains a poster child for defensive investing. The company's unique membership-based model and pricing discip ...

Core Insights - The Shanghai Hongqiao Qianwan Impression City MEGA has achieved over 70% leasing rate and is set to introduce over 350 quality lifestyle brands focusing on social gatherings, family interactions, pet-friendly activities, and outdoor sports by the end of the year [1] Group 1 - The project is the second Impression City MEGA in Shanghai, complementing the existing 48,000 square meters Costco China flagship store and the 110,000 square meters Hongqiao International Business Center [1] - The overall area of the super complex will reach 400,000 square meters, covering various scenarios including living, office, and retail [1]

Core Viewpoint - Costco's stock is currently overvalued despite its strong business performance, making Coca-Cola and PepsiCo more attractive investment options for income and value-focused investors [4][14]. Group 1: Costco - Costco operates on a membership model, providing a reliable revenue stream with a high member renewal rate of approximately 90% [2]. - The company is experiencing growth through new store openings and increased customer spending, but its stock valuation is high with P/S, P/E, and P/B ratios above five-year averages [4]. - The dividend yield for Costco is low at around 0.6%, which is disappointing for income-focused investors [5][4]. Group 2: Coca-Cola - Coca-Cola has shown strong performance with a 5% growth in organic revenues in the second quarter, appealing to consumers despite inflation concerns [6][7]. - The stock is reasonably priced with P/S, P/E, and P/B ratios at or slightly below five-year averages, and a dividend yield of 3% [8]. - Coca-Cola is considered a better value than Costco due to its strong business performance and reasonable stock valuation [8][14]. Group 3: PepsiCo - PepsiCo's stock is undervalued with P/S, P/E, and P/B ratios significantly below five-year averages, and a dividend yield of approximately 4% [10]. - The company reported a lower organic sales growth of 2.1% in the second quarter compared to Coca-Cola, indicating underperformance [11]. - PepsiCo is a diversified business with a history of dividend growth, and recent acquisitions may help it regain momentum [12][13].

Investment Rating - The report maintains a "Weaker than Market" rating for the U.S. stock market [1] Core Insights - The U.S. stock market experienced a sudden pullback influenced by non-farm employment data, with the S&P 500 declining by 2.4% and the Nasdaq by 2.2% [3] - Among sectors, large-cap value stocks outperformed large-cap growth and small-cap stocks, indicating a preference for stability in turbulent market conditions [3] - The report highlights that three sectors saw gains while 21 sectors faced declines, with utilities, food and staples retailing, and media and entertainment being the only sectors to rise [3] Summary by Sections Price Trends - The S&P 500 fell by 2.4% and the Nasdaq by 2.2% this week, with large-cap value stocks declining by 1.8% compared to a 3.1% drop in large-cap growth stocks [3] - Utilities (+1.6%), food and staples retailing (+0.9%), and media and entertainment (+0.2%) were the only sectors to increase, while transportation (-5.9%), materials (-5.1%), and retail (-4.8%) faced the largest declines [3] Fund Flows - The estimated fund flow for S&P 500 constituents was -$16.95 billion this week, a significant increase from the previous week's -$2.2 billion [4] - Media and entertainment (+$1.59 billion), utilities (+$0.27 billion), and food and staples retailing (+$0.042 billion) saw inflows, while healthcare equipment and services (-$3.47 billion) and financials (-$4.15 billion) experienced the largest outflows [4] Earnings Forecast - The report indicates a 0.6% upward adjustment in the 12-month EPS forecast for S&P 500 constituents, with 18 sectors seeing an increase and 5 sectors experiencing downgrades [5] - Retail (+3.3%), media and entertainment (+2.0%), and technology hardware (+1.5%) led the upward revisions, while healthcare equipment and services faced a significant downgrade of -3.6% [5]

Core Viewpoint - Costco and Target are two prominent retail companies that have recently underperformed in the stock market, presenting potential investment opportunities at more attractive prices [1] Valuation - Costco has a market capitalization of over $413 billion, while Target's market cap is approximately $47 billion, reflecting investor confidence in Costco's growth [5] - Costco's trailing P/E ratio is 52.8, above its three-year median of 46.5, indicating it may be overvalued, whereas Target's P/E ratio is 14.6, below its three-year median of 17, suggesting a potential discount [6] Shareholder Returns - Costco increased its quarterly dividend from $1.16 to $1.30 per share, marking its 21st consecutive annual raise, resulting in a yield of 0.56% [8] - Target, a Dividend King, raised its dividend from $1.12 to $1.14 per share, yielding 4.4% with a 49% payout ratio, allowing for continued dividend increases [9] - Target has been more aggressive in share repurchases, buying back $251 million worth of stock last quarter, while Costco spent $215 million mainly to offset dilution [10][11] Recent Financial Performance - Costco reported $62 billion in revenue for the last quarter, an 8% year-over-year increase, with net income rising 13% to $1.9 billion [13] - Target's revenue declined 2.8% to $23.8 billion, with comparable store sales down 5.7%, although online sales increased by 4.7% [15] - Costco's membership renewal rates are high at 92.7% in the U.S. and Canada, indicating strong customer loyalty [14] Outlook - Costco's consistent growth and strong digital performance provide a competitive advantage, while Target faces uncertainty with projected adjusted EPS of $7 to $9 for 2025 [16][18] - In a challenging economic environment, Costco's stability and membership model position it as a more favorable investment choice compared to Target [18]

Key Takeaways COST reported $13.8B in cash as of May 11, 2025, up sharply from $9.9B on Sept. 1, 2024.Costco's total current assets of $38.2B exceed current liabilities of $37.6B, ensuring liquidity.COST's equity rose to $27.1B from $23.6B, reflecting retained earnings and internal financing strength.Costco Wholesale Corporation’s (COST) balance sheet reveals a robust financial position, highlighted by strong liquidity and prudent asset management. As of May 11, 2025, the company reported $13,836 million in ...

Core Insights - The Fidelity MSCI Consumer Staples Index ETF (FSTA) is designed to provide broad exposure to the Consumer Staples sector and was launched on October 21, 2013 [1] - The ETF has gained popularity among both institutional and retail investors due to its low cost, transparency, flexibility, and tax efficiency [1][2] - FSTA has amassed over $1.35 billion in assets, making it an average-sized ETF in its category [3] Index Details - FSTA aims to match the performance of the MSCI USA IMI Consumer Staples Index before fees and expenses [3] - The MSCI USA IMI Consumer Staples Index reflects the performance of the consumer staples sector in the U.S. equity market [3] Costs - The ETF has an annual operating expense ratio of 0.08%, making it one of the least expensive options in the sector [4] - It offers a 12-month trailing dividend yield of 2.18% [4] Sector Exposure and Top Holdings - The ETF is heavily allocated to the Consumer Staples sector, with approximately 99.9% of its portfolio dedicated to this area [5] - Costco Wholesale Corp (COST) constitutes about 12.68% of total assets, followed by Walmart Inc (WMT) and Procter & Gamble Co (PG) [6] - The top 10 holdings represent around 63.33% of total assets under management [6] Performance and Risk - FSTA has increased by approximately 5.08% year-to-date and 9.08% over the past year as of July 28, 2025 [7] - The ETF has traded between $47.94 and $52.85 in the past 52 weeks [7] - With a beta of 0.58 and a standard deviation of 12.44% over the trailing three-year period, it is considered a medium-risk investment [7] Alternatives - FSTA carries a Zacks ETF Rank of 3 (Hold), indicating it is a reasonable option for investors seeking exposure to the Consumer Staples sector [8] - Other alternatives in the market include the Vanguard Consumer Staples ETF (VDC) and the Consumer Staples Select Sector SPDR ETF (XLP), with VDC having $7.64 billion in assets and XLP $15.95 billion [10]

Core Viewpoint - Costco has removed the "Ma Liu Ji" spicy sour noodles from multiple locations due to quality control issues, following customer complaints about moldy products [1][2][3]. Group 1: Customer Complaints - Customers in cities like Shenzhen, Shanghai, and Ningbo reported purchasing moldy "Ma Liu Ji" spicy sour noodles from Costco, with one customer sharing images of the product showing signs of mold [3][4]. - A specific case involved a customer who bought a box of "Ma Liu Ji" spicy sour noodles for 65.9 yuan, which contained eight packets, leading to an estimated price of over 8 yuan per packet [3]. - Another customer in Ningbo also reported similar issues with the product purchased for 49.9 yuan, with the same production date and visible mold [6]. Group 2: Company Response - A representative from Costco stated that the product was removed after a routine quality inspection revealed quality fluctuations, and there is currently no timeline for its return [2]. - Attempts to contact "Ma Liu Ji" and its CEO for comments on the situation were unsuccessful [9]. Group 3: Company Background - "Ma Liu Ji" was established in 2020 and has three associated companies, with "Shi Tong Da" responsible for the operation of the instant food segment, including the spicy sour noodles [7]. - The spicy sour noodles are primarily produced by a third-party manufacturer, A Kuan Food [7]. - The product was officially introduced to Costco in January 2025 [8].

Group 1 - Infrastructure Capital Advisors is a leading provider of investment management solutions for income-focused investors [1] - Jay Hatfield serves as CEO and CIO, and is the lead portfolio manager for multiple ETFs including InfraCap Small Cap Income ETF (NYSE: SCAP) and InfraCap Equity Income Fund ETF (NYSE: ICAP) [1] - The company frequently appears in major financial media outlets such as Fox Business, CNBC, and Bloomberg Radio/TV [1] Group 2 - Infrastructure Capital publishes a monthly market and economic report, quarterly commentaries, and various research materials [1] - The company hosts a monthly webinar and participates in industry conferences to provide educational resources for investors [1]

Core Insights - Apple and Costco have generated similar investment returns over the past decade, becoming two of the world's largest companies by market cap [1] - Both companies are expected to continue being long-term winners, but investors should be cautious about the price at which they buy [2] Company Overview - Apple is a leading smartphone and personal electronics company with over 2.35 billion active iOS users globally, while Costco is a membership-only warehouse retailer with a diverse range of goods [4] - Both companies have established core businesses but are experiencing slower growth rates; Apple is expanding its user base and subscription services, with service revenue reaching nearly $53 billion in the first half of the year, up 12.7% year over year [5] - Costco's growth is driven by membership increases, with paid memberships rising by 6.8% year over year to 79.6 million; membership dues are a significant profit contributor [6] Performance Comparison - Over the past decade, both companies have shown remarkably similar stock performance, with annualized returns that have significantly outperformed the S&P 500 [7] - Both companies offer small dividends, with Apple increasing its dividend for 12 consecutive years and Costco for 20 years; their dividend yields are around 0.4% to 0.5%, with Costco occasionally providing special dividends [9] Future Growth Prospects - Analysts project Apple to grow earnings at an average of 10.6% annually, compared to about 9% for Costco [6] - Apple faces challenges in integrating AI features into its devices, but its loyal user base and sticky ecosystem provide some resilience; despite this, Apple is considered the better stock to buy now [10][11] - Costco's stock price has expanded faster than its profits, leading to a high P/E ratio of nearly 54, which is deemed excessive given its expected 9% earnings growth [12] - Apple, with a P/E ratio of 33, is viewed as more attractive if it achieves double-digit earnings growth, bolstered by significant stock repurchases [13]