Key insights
- The author expresses bullish sentiment on Costco ($COST) ahead of earnings, citing strong business fundamentals, inflation resilience, and potential for a membership fee increase announcement. They are positioned long via call options, anticipating a positive surprise and guidance bump. The thesis suggests that a 'boring' company like Costco can experience significant price movement upon exceeding expectations.
COST isn’t sexy, it just prints. They pay employees well so stores run like machines, boomers are panic-stacking gold bars from the aisle like it’s Mad Max, and inflation is basically their gym membership: they get stronger the worse it gets. Traffic stays packed, carts stay full, and nobody quits their membership. This thing grinds up and to the right until it doesn’t, and earnings is where it flexes.
Positioning for a beat + guidance bump:
$COST 5/27 1000C
Not cheap, but quality never is. If they mention membership fee hike timing or strong comps, this rips. Downside feels limited unless macro nukes sentiment.
WSB rule: boring companies make violent moves when they surprise.
I’m in. Not financial advice.