Why Costco Stock Could Actually Underperform the Market
How often do you hear about buying winning stocks? It often seems simple. For example, big-box retailer Costco Wholesale (NASDAQ: COST) is what most would call a winner -- the stock has created eye-popping total returns of 85,000% over its lifetime, turning a $10,000 investment into $8.5 million.
With such a track record, it's hard not to simply stuff such proven winners into your portfolio and wait to get rich. But that's the mistake many investors make -- looking backward instead of ahead. That's why I've done the work to look ahead, and here is why Costco could underperform the market, at least in the short term.
Costco has a lot of fans. For some, it's the famous $1.50 hot dog and soda combo shoppers love. For investors, the company's steady growth and durable business model have given shareholders peace of mind for years. I must admit, the chart below is a pretty picture. There's decades of revenue and earnings-per-share (EPS) growth with nary a blip, aside from the occasional economic crisis.
Source Fool.com
