Costco & Nike Earnings
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Costco and Nike reported earnings last night so we’re going to dive into that briefly here. Normally following these names are not something that I care about (or would invest in) but given the topics I discussed a few weeks ago about the consumer being strained makes this of interest.
We’re also going to cover the following in this post:
- WTI Crude trading above $90/bl & what that means for energy stocks
- Interaction with Ricks Hospitality CEO – when value becomes a victim of forced selling.
- AMA session (remember you can ask questions here)
Costco Earnings
- Earnings per share: $4.86 v. $4.79 expected
- Revenue: $78.9 billion vs. $77.9 billion
- Comparable sales YOY basically flat
- Memberships up +8% from the prior year
Nike Earnings
- Down over -20% YTD
- EPS expected $0.76
- Revenue YoY +2.4% (expected)
- Jeffries downgraded to hold
- Raymond James lowers P/T to $121
Oil Above $91 and Headed Higher
WTI Crude oil traded above $91s and this should continue on its unrelenting move higher. I talked about why that was in a short commentary piece with US World News & Report a few weeks ago here.
- Storage is extremely tight and this was the quiet bull market long that really started over a year ago
- Stockpiles fell at Cushing reaching new lows
- I think $100-$103 are easily in the cards at this point
- Energy stocks have not moved much with it – still waiting for some to come in off the highs
RICKS Hospitality
Earlier this week the CEO of RICK asked a question and that stock was something on my radar from a few years ago from an analyst that sent it my way. I never got into it, but it was something I tracked and given the current state of the credit cycle it’s of interest.
- The valuation/FCF etc. all check out there
- Not everything is technical investing/trading
- The stock and its clubs are subject to slow down if the consumer stays constrained add in higher gas prices and it gets worse
- Maybe lower it’s a trade for some points, but not not, for me.
Next Lesson
Patience Pays and Stock Market Sentiment
GXO Logistics and Stock Market Sentiment
Ready for Take Off or Jet Lagged?
About the Author
Daniel Bustamante is the founder, managing partner, and CIO of Bustamante Capital L.L.C., a multi-strategy hedge fund management firm based in San Juan, Puerto Rico. He has over 10 years of experience in the financial industry, specializing in equities, futures, and event-driven trading strategies.
He is also the founder of TheLongVol.com, a blog and newsletter that shares his insights on his investing process, travel, and other private investments. He has been featured in Bloomberg, Arizona Business Journal, Business Insider, Yahoo! Finance, Forbes, Seeking Alpha, and other publications over his career on Wall Street.
