We have seen some key changes to the Argus Research Institutional Model Portfolio this morning. It is suggesting that investors add shares of Coach Inc. (NYSE: COH) and Costco Wholesale Corp. (NASDAQ: COST), and it is selling shares of Bed Bath & Beyond Inc. (NASDAQ: BBBY) and H.J. Heinz Co. (NYSE: HNZ).
Coach Inc. (NYSE: COH) was started with a 2% weighting of the portfolio. Argus said that despite the problems:
Coach is the company that appears to be best positioned to capitalize on the growth of China’s status-conscious middle class. Next, Coach’s well-developed brand and emphasis on quality and innovation differentiate its products in an era when internet shopping is compressing margins on all but unique merchandise.
Costco Wholesale Corp. (NASDAQ: COST) was added as a 2% weighting and the firm said, “We believe that Costco’s financial strength and ability to deliver extreme values are key differentiators for the stock in the current market environment.” Argus has a Buy rating and said that Costco is one of its favorite merchants.
Bed Bath & Beyond Inc. (NASDAQ: BBBY) was being sold out as a position entirely, as the shares have underperformed the S&P 500 by 20% since it was added to the model portfolio last summer. H.J. Heinz Co. (NYSE: HNZ) is being sold out entirely due to the acquisition, so any other explanation is immaterial.