Making a noteworthy insider sell on October 15, Pierre Riel, Executive Vice President at Costco Wholesale COST, is reported in the latest SEC filing.

What Happened: Riel opted to sell 2,000 shares of Costco Wholesale, according to a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday. The transaction’s total worth stands at $1,793,426.

In the Wednesday’s morning session, Costco Wholesale‘s shares are currently trading at $881.9, experiencing a down of 1.42%.

All You Need to Know About Costco Wholesale

Costco operates a membership-based, no-frills retail model, predicated on offering a select product assortment in bulk quantities at bargain prices. The firm avoids maintaining costly product displays by keeping inventory on pallets and limits distribution expenses by storing its inventory at point of sale in the warehouse. Given Costco’s frugal cost structure, the firm is able to price its merchandise below competing retailers, driving high sales volume per warehouse and allowing the retailer to generate strong profits on thin margins. Costco operates over 600 warehouses in the United States and enjoys over 60% market share in the domestic warehouse club industry. Internationally, Costco operates another 270 warehouses, primarily in markets such as Canada, Mexico, Japan, and the UK.

Unraveling the Financial Story of Costco Wholesale

Positive Revenue Trend: Examining Costco Wholesale’s financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 0.96% as of 31 August, 2024, showcasing a substantial increase in top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Consumer Staples sector.

Navigating Financial Profits:

• Gross Margin: The company faces challenges with a low gross margin of 12.68%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Costco Wholesale’s EPS outshines the industry average, indicating a strong bottom-line trend with a current EPS of 5.3.

Debt Management: Costco Wholesale’s debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.35.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 54.05, Costco Wholesale’s stock is perceived as being overvalued in the market.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 1.56, Costco Wholesale’s stock is perceived as being overvalued in the market, particularly in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Costco Wholesale’s EV/EBITDA ratio, surpassing industry averages at 32.41, positions it with an above-average valuation in the market.

Market Capitalization Highlights: Above the industry average, the company’s market capitalization signifies a significant scale, indicating strong confidence and market prominence.

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Why Pay Attention to Insider Transactions

Insider transactions shouldn’t be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

In the realm of legality, an “insider” is defined as any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities under Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are required to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

Important Transaction Codes

Taking a closer look at transactions, investors often prioritize those unfolding in the open market, meticulously cataloged in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A signifies a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Costco Wholesale’s Insider Trades.

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This article was generated by Benzinga’s automated content engine and reviewed by an editor.