Investors weren’t exactly stocking up on Costco Thursday.
Shares of the warehouse retailer were relatively flat despite reporting third-quarter earnings results shy of street estimates. The company said it was hurt by increased expenses.
Costco, along with much of the retail and consumer discretionary sector, is underperforming the broader market by a pretty big margin this year. So, is there any reason to buy into the name now?
“Retail has been a very poor place to be this year,” said Richard Ross of Auerbach Grayson. “High end, low end, in the middle—there’s been no place to hide and Costco’s no exception.”
(Watch: Costco a red flag for economy?)
And based on the charts alone, Ross sees cause for concern in the big bulk retailer.
“You see for the better part of the last four years a very well-defined trend channel,” he noted. “We've now broken below that trend channel and taken out the 50-week moving average for the first time in over three years. I think you want to keep one eye on the exit with Costco and retail in general.”
But, in classic bull versus bear fashion, Steve Cortes of Veracruz TJM sees no reason to run from Costco.
“I certainly respect Rich’s charts, but I will tell you, at least in the Cortes household, Costco is definitely a buy. My wife spends so much money there each week, I’m convinced she has a crush on the store manager,” he joked.
And according to Cortes, the Costco fundamentals are strong for two reasons: customer service, and strong customer base.
“When you combine employees that care and are well paid with a customer base that right now has money for discretionary spending, I think this is one of the few along the retail space you can safely put money.”
Ross got the final word in Thursday’s debate over Costco, admitting it’s a great company, but also stressing that there is a difference between a great company and a great stock.
Who won the debate? Check out the video and tweet us @CNBCNumbers to tell us what you think.