Investing Club: Don't worry about Costco's stock drop, buy it on the dip, Cramer says

Published Fri, Mar 4 202210:44 AM ESTUpdated Fri, Mar 4 202211:23 AM EST

Club members should not worry about Friday's roughly 3.5% decline in Costco (COST) stock because the big-box retailer had an amazing quarter as we reported after the closing bell Thursday evening. CNBC's Jim Cramer said Friday morning on "Squawk on the Street" that Costco is the greatest of all time — "it is the GOAT retailer," echoing a note from Barclays , whose analysts also liked the better-than-expected quarterly earnings and revenue. Costco, a Club holding with about a 2.7% weighting in Jim's Charitable Trust portfolio, delivered a nearly 16% year-over-year increase in revenue to $51.9 billion in its fiscal second quarter on strong same-store sales. Adjusted per-share earnings grew 36% to $2.92. "The stores in China are doing incredible. They're adding more stores than people thought. Hearing aids are back. Food court is back. Free samples are back. Buy," Cramer said Friday. There are two other potential catalysts on the horizon — a special dividend and higher membership dues — that also bolster our resolve. Cramer praised Costco CFO Richard Galanti, saying he "teased you on the special dividend and teased you on the raised membership." On the post-earnings call Thursday evening, Galanti said a special dividend is "certainly an arrow in our quiver, but we haven't made any decision at this point." Responding to an analyst question about Amazon Prime membership increases and whether Costco will hike its dues, Galanti said saying the company feels good about "if and when we want to do it, we'll be able to." (Jim Cramer's Charitable Trust is long COST and AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Customers carry their items after shopping at Costco in Washington D.C., May 5, 2021.

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