Jim Cramer hosted Jim Sinegal, the CEO of Costco Wholesale Corp. (NASDAQ: COST), for a live interview on tonight’s MAD MONEY on CNBC. For starters, Costco Wholesale shares are doing better than many retail stocks during the economic slowdown.
Cramer came out and said this one is a buy, particularly with its genius CEO who actually pays better wages. He thinks this is part of the magic. Cramer also thinks that analysts have been too negative and noted that they must not be shopping there to come up with their conclusions. In the interview, Sinegal said he’s very involved but everyone else in the company is too. He’d rather hire good people at better wages to keep them and their loyalty. Sinegal also thinks he can double the size of Costco over the next ten years. He noted that the stores are item businesses and they can stay opportunistic on their product mix whether it is books or other merchandise. He also noted that value concept is universal for all demographics, but noted that the main customers are at the higher-end of demographics. At the end Cramer called this the best retailer in the country.
This isn’t Cramer first praise of Costco nor of Sinegal. In fact Cramer previously named Sinegal as one of his Top 9 CEO’s before this.
Cramer was also just positive on this one last week, and he’s been positive on Costco more than he hasn’t over the last year or more. Costco shares closed up 3% today at $65.50 its shares were up another 0.6% to $65.91 after-hours right before the interview. Its 52-week trading range is $53.00 to $72.68.
Jon C. Ogg
March 24, 2008
Jon Ogg produces the Special Situation Investing Newsletter and can be reached at firstname.lastname@example.org; he does not own securities in the companies he covers.