Subject: Re: Costco
If I owned it I'd be lightening up right now

Or covered calls would be tempting me!
(As it happens I do own it, in a quant portfolio, but it's pretty minor as a fraction of my overall investments.)

The earnings trajectory is so smooth that good old P/E gives a relatively stable valuation metric.
From 5-10 years ago, typical figures were 26-33. Current is about 55. Even for Costco, that does seem a bit rich.

The business is solid, and the growth hasn't really slowed down. All of sales/share, earnings/share, cash flow/share, dividends/share, and book/share are up 11%/year to 16%/year in the last 5 years. And pretty much all of those figures are higher than the equivalent metric for the prior 5 years.

At the other extreme, the firm that mystifies me is Coke. Real EPS essentially no change 2010-2023, if anything a trend line slopes downwards a hair. Flat if you include 2024 higher estimates. Sure, it's a steady earner and not going anywhere in my lifetime, but I don't see the charm in paying 26 times earnings for a cash cow, essentially a perpetual inflation protected bond with a 3% coupon. At that valuation level you can get shares in a solid and solidly growing firm.

Jim