For years Costco has relied on the loyalty of its customers and its stock holders. Many of the people that hold stock in Costco won’t be rushing to sell their shares because they have been with the company for so long. However, the more recent developments in Costco’s stock have many shareholders wondering if they should continue their holdings with the company.
About Costco Stock
Costco stock has been fluctuating between $140 and $170 per share for the past year. Stock prices fluctuate regularly so it is not entirely surprising that Costco has such a broad gap between its highs and its lows within the past year. Its most recent high was just last month.
Seeing this trend has worried many shareholders but it may not be the downfall of the company. Looking at the numbers and past trends, should you sell your Costco stock?
Why is Costco Stock Falling?
According to The Street, further declines in Costco stock are inevitable. The Street predicted that Costco stock would fall to $144 before seeing any improvement. However, the stock has been down for quite some time. Costco has fallen below the 50-day and 200-day averages and continues to decline.
For years Costco’s stock has been looked to for a sense of value and security. Costco has been the poster child of consistency when it came to the company, its decisions and its stock. Why is Costco’s stock failing now?
Many people point to the ever-so-disappointing switch in co-branded credit cards. In June Costco switched its co-branded card to Citigroup-Visa from American Express. According to multiple news sources and Reddit forums, Costco has not handled the switch over well. Many people are infuriated and have begun to cancel their memberships. This isn’t enough reason to sell your stock in bulk and run away though.
Should You Sell Your Costco Stock?
Many of Costco’s shareholders are loyal and know that Costco hits low points but will also climb back up. Take a look at the graph below:
Having money in the stock market can be nerve wrecking at times and many people want to run at the first sign of trouble or a seemingly steep decline, like the one we’ve seen in Costco this month. The key to success in the stock market is doing research about the company’s trends over a long period of time and not just one month. So, no. Don’t sell your Costco shares quite yet (unless you need that money). The company will likely make a full comeback in the upcoming holiday season.
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For more info on Costco check out these articles.
You can check out our articles for Target as well.
Photo: Flickr: Mike Mozart