Before Thursday’s opening bell, Costco (COST) released its second quarter financial results. Here’s what the results mean for mutual fund investors.
Inside COST’s Results
Earnings
Costco reported earnings of $598 million, or $1.35 per share, up from $463 million, or $1.05 per share, last year. On average, analysts expected to see EPS of $1.18.
Revenue
Revenue increased to $26.87 billion from $25.76 billion last year. Analysts expected to see revenue of $27.7 billion.
Costco Benefited From Lower Fuel Costs
Costco, which is the second largest U.S. retailer behind Wal-Mart (WMT), reported a 29% increase in quarterly profits in its second quarter. The company, which is one of the largest fuel retailers, benefited from lower fuel costs and tax benefits. In the last 12 months, shares of Costco have increased 29%, while Wal-Mart shares have increased only 13%.
The company has certainly benefited from favorable fuel costs, but the spotlight has been on its terminated deal with American Express. This week, COST announced that it will switch to exclusively accepting Visa cards in 2016.
Mutual Funds to Watch
Investors interested in COST may consider a mutual fund as an alternative to owning the individual stock. The funds below currently hold the largest stakes in COST.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| VTSMX | Vanguard Total Stock Mkt Idx | 1.71% |
| FCNTX | Fidelity® Contrafund® | 1.10% |
| VFINX | Vanguard 500 Index | 0.64% |
The Bottom Line
The funds listed above allow investors to gain exposure to COST while remaining diversified. Investors interested in COST may also be interested in Wal-Mart (WMT) or Target (TGT).
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