Argus Adds Costco and Coach to Model Portfolios


We have seen some key changes to the Argus Research Institutional Model Portfolio this morning. It is suggesting that investors add shares of Coach Inc. (NYSE: COH) and Costco Wholesale Corp. (NASDAQ: COST), and it is selling shares of Bed Bath & Beyond Inc. (NASDAQ: BBBY) and H.J. Heinz Co. (NYSE: HNZ).

Coach Inc. (NYSE: COH) was started with a 2% weighting of the portfolio. Argus said that despite the problems:

Coach is the company that appears to be best positioned to capitalize on the growth of China's status-conscious middle class. Next, Coach's well-developed brand and emphasis on quality and innovation differentiate its products in an era when internet shopping is compressing margins on all but unique merchandise.

Costco Wholesale Corp. (NASDAQ: COST) was added as a 2% weighting and the firm said, "We believe that Costco's financial strength and ability to deliver extreme values are key differentiators for the stock in the current market environment." Argus has a Buy rating and said that Costco is one of its favorite merchants.

Bed Bath & Beyond Inc. (NASDAQ: BBBY) was being sold out as a position entirely, as the shares have underperformed the S&P 500 by 20% since it was added to the model portfolio last summer. H.J. Heinz Co. (NYSE: HNZ) is being sold out entirely due to the acquisition, so any other explanation is immaterial.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Retail Tagged: BBBY, COH, COST, HNZ