We recently published a list of 11 Best cyclical actions for purchase according to analysts. In this article, we will examine where Costco Wholesale Corporation (Nasdaq: Cost) applies to other best cyclical actions to buy according to analysts.
Stocks against cyclics are distinguished because they tend to perform well during economic slowdowns, offering relative stability when markets become volatile. These resilient companies generally operate in more defensive sectors such as public services, consumer food and health care, offering products and services that consumers need, no matter how tight their portfolios are. In addition, truly countertering actions are those that experience growth accelerations during recession, due to consumers who actively seek means to save money – think of stores at reduced prices or cheap clothing retailers. What makes the best actions against cyclicals, particularly convincing, is their stability during slowdowns: investors seek refuge in these actions because they tend to maintain (or even increase) their value while other market segments have trouble.
Financial theory, as launched by Markowitz’s modern portfolio theory (1952), suggests that the inclusion of counter-cyclical actions in a portfolio can improve global yields adjusted to risk by considerably reducing the volatility of volatility while not altering the return profile. Modern literature underlines that an effective diversification can be obtained by combining financial assets whose yields are inversely correlated with each other; Counter-cyclical stocks align well with this principle because of their low or even negative correlation with large markets. Empirical studies confirm that portfolios containing actions against cyclics tend to present lower volatility and more stable yields during periods of recession – this is a highly sought -after investors. The legendary leader of the funds, Peter Lynch, also underlined the strength of stable companies in recession; Here is what he said:
“In economic slowdowns, invest in companies that make essential products; People will always buy toothpaste and food regardless of the economy. ”
We believe that current market conditions are potentially suitable for investors to start considering adding the best actions against cyclics to their wallets. The biggest problem we see with the current American stock market is that Trump 2.0’s pricing disorders and a plethora of other aggressive changes in the political position of the new administration are to undermine consumer confidence in the future. Consumers, although always strong and in good health, have a rapid deterioration of confidence – the consumer confidence index has decreased strongly in March for the lowest reading since January 2021. Even the Trump administration itself admits that its commercial policies and Doge could cause a certain short -term slowdown, but says that they should lead to the “long -term golden age”.
In addition, commercial surveys show that more and more people expect less jobs in the coming months. A strong deterioration of the two measures has historically coincided with the enclosures of several recessions, such as the bursting of the Dot-Com bubble, the 2008 crisis and the bear market in 2022. It is not surprising that many renowned research stores, including the search for Yardeni and Goldman Sachs, have recently increased their probability that the American economy will enter into a recession in 2025 ( that the estimated probability remains less than 50% on average).
The engines of a recession could be a potential inflation shock from the prices expected for next week, a general slowdown in the expectations of the business capex which can trigger layoffs, as well as a more frugal consumer due to the overall uncertainty and the deterioration of purchasing power. Under such conditions, counterattack actions could attend a significant acceleration in their business, which in turn can result in higher yields compared to the wide market. We believe that the best contry-cyclical actions are those that have a significant increase in analysts, as well as proven history of exceptional performance during previous economic cycles.
We have consulted the commercial literature on the characteristics of the best actions against cyclicals and manually selected 20-30 actions with well-performed history during economic slowdowns, such as the 2008 and 2022 bears markets. Then we select the first 11 actions with the greatest average increase potential, as estimated by analysts and classions in the growing order. For each stock, we also include the number of hedge funds that have the stock in the fourth quarter of 2024.
Why are we interested in the stocks in which the hedge funds stacked? The reason is simple: our research has shown that we can surpass the market by imitating the main choices of stock of the best hedge funds. The strategy of our quarterly newsletter selects 14 shares with small capitalization and large capitalization each quarter and has rendered 373.4% since May 2014, beating its reference with 218 percentage points (See more details here).
Costco Wholesale Corporation (Cost) is the best actions against cyclic to buy according to analysts?
A customer in an Aisles warehouse, traveling the wide range of brand and private brand products.
Average upward potential: 13.07%
Number of hedge holders: 96
Costco Wholesale Corporation (NASDAQ: Cost) is a global retailer operating only membership warehouse clubs that offer a wide range of products at competitive prices. Its vast categories of products include grocery stores, electronics, household appliances, clothing and home products, emphasizing high quality national and private brands like Kirkland Signature. The cost maintains a significant international presence with warehouses in countries like Canada, Mexico, the United Kingdom, Japan, South Korea and Australia. The counter-cyclical element of the company’s company lies in its ability to attract consumers concerned about costs during economic slowdowns, because its bulk and value price offers are increasingly attractive.
Costco Wholesale Corporation (NASDAQ: Cost) said solid results from the second quarter for the year 2025, net profit reaching $ 1.788 billion, or $ 4.02 per diluted share. This reflects an increase of 8.4% when excluding certain elements related to tax. Net sales increased by 9.1% in annual sliding to $ 62.53 billion, while comparable sales increased by 6.8%, or 9.1% after adjustment for fuel prices and currency effects. Membership measures remained solid, with a renewal rate of 93% in the United States and Canada. Memberships of remunerated households increased by 6.8% to 78.4 million, and executive memberships experienced a 9.1% increase, which now represents 47.1% of all remunerated members and generating 73.8% of world sales.
On the operational side, Costco Wholesale Corporation (NASDAQ: Cost) has reached modest margin improvements, the gross margin going to 10.85% and SG & A costs drop to 9.06%. Non-foods have led the growth of merchandise, in particular in categories such as gold, jewelry, gift cards, toys, household items and sports items. Fresh foods have displayed gains with a high figure, while food and nuclei have provided halfway up mid-chiffre growth. For the future, the management plans to open 28 warehouses during the year 2025, 25 being new net sites after taking into account relocations. Despite the potential pressures of currencies and prices, the company intends to rely on its global purchasing partnerships and suppliers to help compensate for cost increases for members. Cost is one of the best actions against cyclics to buy because it has always surpassed the market in all economic cycles in the past 20 years.
Overall, the cost rank 4th On our list of the best counterthyinous actions to buy according to analysts. While we recognize the potential of the cost as an investment, our conviction lies in the conviction that AI actions are more promising to offer higher yields and do it within a shorter period. There is a stock of AI that has increased since the beginning of 2025, while the popular AI shares have lost around 25%. If you are looking for a more promising stock of AI than the cost but which is negotiated within 5 times its income, consult our report on this subject Stock ai the cheapest.
