Mad Money

Buy Costco

Cramer: Buy Costco

Costco Wholesale has a novel business model: Pay your workers a fair wage, and your company will see great results.

CEO and President Jim Sinegal stands behind it, saying the strategy’s success is reflected in 25 years of Costco’s business. But that’s not the only path to profit the company has. Sinegal, in an interview with Cramer Monday, touted his item-focused approach to retail.

Costco might have a thriving book business, but the CEO admitted he was shamelessly opportunistic. If a new hot item came along that would outsell books, Sinegal would simply switch out one for the other. “We don’t feel we have to have 100 books just because we have a book table,” he said. “We can always put something else there.”

As popular as Costco may be with consumers, there’s still plenty of room for growth, Sinegal said, both in the U.S. and overseas. “We could double the size of our company over the next 10 years.”

Because Costco’s “the best retailer in America,” Cramer said, the stock’s “going higher.”

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