We recently compiled a list of the Louis Navellier’s Top 10 Stock Picks Heading into 2025.In this article, we are going to take a look at where Costco Wholesale Corporation (NASDAQ:COST) stands against Louis Navellier’s other stock picks.
Louis Navellier, Chairman and Founder of Navellier & Associates, is a renowned American investor who is celebrated for his skill in navigating the stock market and delivering impressive profits. Leading a firm dedicated to growth investments, Navellier’s strategy is reflected in his high-performing portfolio. His journey began in a college mainframe computer lab in the 1970s. While studying at the now Cal State East Bay, Navellier set out to validate the prevailing belief that beating the market was impossible. His original aim was to create an index product before index investing became mainstream, attempting to replicate the S&P 500. Ironically, his project failed by succeeding. Rather than simply matching the market, his model consistently outperformed it, uncovering inefficiencies that became the cornerstone of his investment philosophy. In 1987, Navellier would go on to establish Navellier & Associates, a fund dedicated to providing customized portfolio strategies aimed at maximizing returns while effectively managing risk for individual investors.
With decades of expertise in translating academic theories into real-world market strategies, Louis Navellier champions a disciplined approach to quantitative analysis for identifying market-beating stocks. His methodology follows a meticulous three-step process: quantitative analysis to pinpoint high-potential opportunities, fundamental analysis to evaluate each candidate’s financial health and growth prospects, and portfolio optimization to fine-tune the selection for maximum performance. Throughout his career, Navellier has identified numerous “thousand-percent winners,” from Conair’s dominance in the hair dryer market during the 1980s to NVIDIA’s leadership in AI chips today. His methodology emphasizes discovering well-managed companies that lead their industries, particularly those with expanding operating margins and steady earnings growth.
In a Market 360 article, Louis Navellier offered insights into the recent presidential election and its potential market implications under a Trump 2.0 administration. He highlighted the critical role manufacturing played in the 2024 election outcome by pointing to the Institute of Supply Management’s (ISM) report, which revealed a decline in the manufacturing index to 46.5 in October from 47.2 in September, signaling contraction (any reading below 50). The details paint an even grimmer picture: The Bureau of Labor Statistics’ payroll report has revised August and September job figures downward by a combined 112,000. As such, manufacturing took a significant hit, with 46,000 jobs lost, partly due to Boeing’s ongoing challenges. Here’s what Navellier had to say about the report:
“All in all, this payroll report was a statistical mess and will likely need to be revised when we have more information. But it also drove Treasury yields lower and increased pressure on the Federal Reserve to cut key interest rates, since the Fed is now more worried about the job market than inflation.”
According to Navellier, the new administration is expected to drive growth in the manufacturing sector through a combination of measures: implementing tariffs to counter unfair overseas competition, encouraging the Federal Reserve to maintain lower interest rates, and leveraging cheaper energy prices that position the U.S. favorably compared to Europe and Japan. He noted that if these strategies succeed, the U.S. could see a manufacturing boom.
On the other hand, Navellier has been one of the biggest heralds of AI and its implications. Currently, many investors remain heavily focused on the “first generation” of AI stocks and while Wall Street’s AI darling is likely to continue generating returns, Navellier states that it has become yesterday’s story. According to the investor, the real opportunity lies in the “second generation” of AI stocks; companies poised to harness generative AI to build profitable enterprises and revolutionize existing industries. This next wave will usher in transformational change of a kind that happens only once every 25 years. The companies that adapt to this second wave of AI will soar, delivering years of outperformance. Those that fail to embrace this shift risk falling behind—or even disappearing altogether. Conversely, Navellier believes that AI will also dismantle outdated industries and businesses. The “Real AI Boom”, as he calls it, will mint new millionaires—and even billionaires—while driving hundreds, if not thousands, of stocks worldwide to collapse.
For this analysis, we examined Navellier & Associates’ stock portfolio from the third quarter of 2024. The stocks are ranked based on the firm’s stake value in each holding.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A customer in a warehouse aisles, browsing the wide range of branded and private-label products.
Navellier & Associates’ Stake Value: $19.18 million
Number of Hedge Funds Holders: 75
Costco Wholesale Corporation (NASDAQ:COST) operates a membership-based warehouse club chain, offering discounted bulk pricing on a wide range of products, including groceries, electronics, and household goods. The loyalty of its members drives the company’s profitability, with membership fees serving as a major contributor to its revenue.
In Q4 2024, Costco Wholesale Corporation (NASDAQ:COST) reported strong financial results, with revenue climbing 1% year-over-year to $79.7 billion and net income rising 9% to $2.354 billion, while e-commerce sales were a standout, surging by 18.9%. Additionally, the company updated its executive bonus plan to include environmental and social performance criteria, effective fiscal year 2025, reflecting its commitment to sustainability.
On October 17, Tigress Financial Partners reiterated its Buy rating for Costco Wholesale Corporation (NASDAQ:COST) shares and raised the price target to $1,065. The firm attributed its bullish stance to Costco’s consistent in-store traffic and robust e-commerce growth. Tigress also emphasized Costco’s ability to deliver above-average Return on Capital and growing Economic Profit, key contributors to enhanced shareholder value.
Overall COST ranks 4th on our list of Louis Navellier’s top stock picks heading into 2025. While we acknowledge the potential of COST as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than COST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
