Categories: Stock Market NewsVIP Alliance Hotlines

VIP Alliance Weekly Update

I. Conservative Recommendation

Costco Wholesale (COST)

A recommendation in Smart Money Masters, Costco is Charlie Munger’s favorite stock and it tumbled 9.76% over the past week on news that Amazon.com is taking over Whole Foods.

Both Goldman Sachs and Deutsche Bank (DB) downgraded Costco, saying the competitive advantage from its food business is at risk due to Amazon. DB reduced its price target for the company to $172 from $187.

Not everyone on Wall Street is jumping ship. Cowen Group reiterated its outperform rating and $190 price target, saying Costco will survive Amazon’s onslaught.

Although the dust has yet to settle, I think this is a textbook case of a market overreaction and a buying opportunity.

II. Aggressive Recommendation

Walmart Stores (WMT)

A recommendation in Alpha Algorithm, Walmart also fell 5.01% on news of the Whole Foods acquisition.

That said, the rationale for buying Walmart is the same as for buying Costco Wholesale (COST) above. It is more “aggressive” in the sense that Costco has a more loyal customer base.

Sincerely,

Nicholas A. Vardy

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business. Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central. Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal. When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.