Costco (COST) reported second quarter EPS of $1.10 versus analyst estimates of $1.06. The 39% percent increase in quarterly profit was due to increased sales, membership fees and a tax benefit related to a special cash dividend. Same store sales (SSS) were up 5% in the U.S. and 4% internationally. Overall, total revenue increased 8.3% to $24.87 billion. Analysts were expecting earnings of $1.06 a share on $25.03 billion in revenue. Revenue from membership fees increased 15% to $528 million. In November of 2011,Costco increased membership fees by 10% in the U.S. and Canada, the first increase in five years.
Gurus for the most part have been bullish on Costco despite its shares making all time highs. The one notable bear is Bill Gates who completely sold out of his position which was previously 3.5% of his portfolio. Other than that, Gurus who have established or added to a new position include:
- George Soros, Soros Fund Management (New Buy, 0.47% impact to portfolio)
- Pioneer Investments
- Jim Simons, Renaissance Technologies
- Jeremy Grantham , GMO
- Louis Moore Bacon, Morore Capital Management (New Buy, .07% impact to portfolio)
- RS Investment Management
- Paul Tudor Jones, The Tudor Group (New Buy, .01% impact to portfolio)
Shares of electronics retailer RadioShack (RSH) are under pressure after Goldman Sachs downgraded the electronics retailers from “neutral” to “sell” calling RadioShack’s business model “challenged” and sees “minimal equity value.” RadioShack’s shares had climbed 16% since Moody’s lowered its credit rating on March 5 one notch further into junk territory on “operating performance and profitability:"
Gurus are mixed on the electronics retailer. Those establishing a new position include GMO’s Jeremy Grantham and Renaissance Technology’s Jim Simons.
Those selling out or reducing their position include Gotham Capital’s Joel Greenblatt and SAC Capital’s Steven Cohen.
Shares of YUM Brands (YUM), which operates KFC, Taco Bell and Pizza Hut, are up almost 5% in early trading after the company said same-store sales in China rose 2% in February. Analyst were expecting same-store sales to fall 9% for the month. This is great news for YUM as the company faced heavy criticism following a chicken controversy that caused sales to plunge late last year. Sales in China plunged 20%, 5% less than what the company had previously forecast. The company last month warned that plunging China sales would cause 2013 profits to shrink rather than grow. It also said it expected KFC same-store sales in China to turn up by the fourth quarter. (Reuters)
Several Gurus stepped in and scooped up shares of YUM as the company’s tries to repair its image in China. Gurus who established a new position or added to YUM include:
- Robert Karr, Joho Capital (New Buy, 4.35% impact to portfolio)
- Jeremy Grantham, GMO
- Joel Greenblatt, Gotham Capital (New Buy, .02% impact to portfolio)
- Pioneer Investments (New Buy, .01% impact to portfolio)
- Ron Baron, Baron Funds
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