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Costco Wholesale Corporation (COST)
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Microsoft Corporation (MSFT)
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Vanguard FTSE Developed All Cap ex North America Index ETF (CAD-Hedged) (VI)
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Berkshire Hathaway Inc. (BRK.B)
Q: I have 4 stocks doing very well in my TFSA, MSFT, BRK.B, VI and APPL. Recently I noted that COSTCO is doing very well and I am considering adding it to my TFSA but am out of space. 1) do you think that adding Costco to my TFSA is a good idea and 2) if so which of the my current stocks above should I replace?
Many thanks. Jane
Many thanks. Jane
5i Research Answer:
We like COST, we think the company has a solid fundamental that would be resilient in any economic environment, and sustainable over the long term. That said, most of the good news in COST is largely priced in, and COST is trading at Forward P/E of 44.5x, investors who purchase COST at the current valuation would do fine, but may not do 'great'. We are okay to average into COST over time, and would be more aggressive if valuation tempers a bit, we would be okay to trim some VI, and add to COST.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in COST, MSFT.