Cramer's Morning Take: Costco 9/20/24

Jim Cramer (0:02)

I'm Jim Cramer, and you're about to hear a sample taken directly from today's CNBC Investing Club morning meeting. Another stock that we own, that a lot of people, that I talk to a lot of club members out here, that people have just said over and over again, how did you know not to sell it, is Costco. And I think that Costco is always expensive, it sells at 55 times earnings, but it is well run, and people want to know, do I get off of Costco? And I have told people, Jeff, no, I want to be in.

Jeff Marks (0:33)

Yeah, they report earnings next Thursday after the close. I mean, look, we already got the special cash dividend, and we got the membership fee increase, right? So maybe in terms of, you know, outside of earnings catalyst, not really there. Also keep in mind, we generally know what the sales picture looks like. They report on a monthly basis, and the monthly sales have been absolutely fantastic, not only just in fresh, but also in non-foods as well, which is a good indicator that they're picking up share versus some others in retail. Stock's been an absolute horse, but yeah, I mean, you raise a good point. The criticism is the multiple, but, you know, it's hard to find such quality like that is Costco.

Jim Cramer (1:19)

You know, the other one that people obviously want to criticize the multiple for is Apple. People feel, well, listen, it's never had this kind of multiple in the mid 30s. How can it have it now? And I keep coming back saying, guys, it's a changed Apple. All right, the more phones they sell, the more phones that are used phones, that go to use phones to other people. It's a forced multiplier when you have a new phone because it then starts a lot of people on a service revenue stream, which keeps getting bigger and bigger and there are no defaults. You get the note that you paid for it in the middle of the night. I think that we're seeing a lot of interest in the finance vertical, a longer battery life, the fact that people are buying this phone without even having all the AI. There's a reason why this stock is going up. It has been completely, completely devoid of any real promotion. We did get a good piece today by UBS, but most of the analysts are negative and they keep talking about how the orders aren't that good. Well, something I'd say is that the stock's not lying, Jeff. That stock is saying, are you kidding me?

Jeff Marks (2:25)

Right. The analysts are using their checks based on lead time, but that's just kind of pre-ordering it and when you may get it. But I mean, look, that's both supply and demand. We know in past years there have been supply and change challenges out of the pandemic.

But I go back to what Mike Siebert said on that money to you just the other night, that sales are well, looking well, and even on the higher end phones, that's good for average selling prices. And we haven't even seen the rollout of Apple intelligence yet. Once that happens, you should see another rush towards buying these phones. So certainly good for the Apple Store.

Jim Cramer (3:06)

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SPEAKER_3 (3:21)

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