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NASDAQ:COST
Pushing up against the upper levels of its historical multiple but it is a great story and a great franchise. Same-store sales are growing well. Demographically they attract exactly the right type of customer. Have been able to raise their fees and have a renewable rate of over 90%. Fees are straight profit.
What differentiates it is the annual fees they change. That is the financial strength of this company. They are a very low margin business. They play the volume game and then overlay the fees from their members and that made them very profitable. They are well managed and he admires them. He thinks it is a good model.