During a recession investors often flock to sectors that are expected to perform well like those that sell consumer staples. When consumers sense a recession coming then they will cut back on discretionary spending in order to prioritise consumer staples.
Costco Wholesale Corporation is an American multinational corporation which operates a chain of membership-only big-box retail stores. As of 2020, Costco was the fifth largest retailer in the worldIf the US does head towards a recession then Costco Wholesale Corporation could significantly gain over the next period of time as a provider of consumer staples.
Costco also has some pretty strong seasonals at this time of year that you must be aware of.
Does this make CostCo a must buy?
Over the last 10 years Costco has only lost value once between May 30 and July 29. The average gain has been 6.42% profit and the maximum gain was -15.98%. The biggest and only loss during that period was in 2017 with a 11.41% loss.
Does it make sense to buy Costco on these strong seasonals?
Major Trade Risks:
Any particularly bad news for Costco shares can impact this seasonal outlook.
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