Costco Wholesale (NASDAQ:COST), which has 23 million members, got a bullish take from Barron's last week.
Despite its large size, the company continues to grow nicely. Earnings are expected to increase at 10%+ annually and same-store sales continue to be strong.
Could Costco be a buyout candidate?
Perhaps. The company has a rock solid balance sheet, with $2 billion in cash. It also owns about 78% of its stores. This should make it easy to raise a lot of debt to get a deal done.
And with the high valuation of Equity Office Properties Trust (NYSE:EOP) buyout, there should be some interested buyers.
In the meantime, Costco still looks good as a standalone investment. Hey, even Warren Buffett's Berkshire Hathaway (NYSE:BRK.A) owns 5 million shares.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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