We recently published a list of Conservative Stock Portfolio: 10 Best Stocks To Invest In. In this article, we are going to take a look at where Costco Wholesale Corporation (NASDAQ:COST) stands against other best stocks to invest in from conservative stock portfolio.

Latest reports indicate that hedge funds have been dumping the shares of technology and media companies at the fastest rate in the past six months. For those who mimic the investing strategy of hedge funds for maximum financial gains, this is cause for alarm. The dumping of tech and media firms by billionaires suggests that it is time for investors to consider pouring their money into more conservative stocks to balance portfolios against riskier growth options. These conservative stocks, also sometimes called blue-chip stocks, are well-established companies with a history of stable earnings, reliable dividends, and strong market positions. These stocks are typically less volatile, making them appealing to risk-averse investors seeking steady growth and income. However, recent developments in the global economy and political landscape may influence the performance and attractiveness of conservative stocks.

Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.

Prominent analysts are also optimistic about the success of conservative stocks this year. For example, per a report published by finance news platform Barron’s, investment bank Stifel predicts that the S&P 500, which gained 28% in 2024 to reach 6,084 points, may face a correction to the mid-5,000s. Barry Bannister, the Chief Equity Strategist at the bank, attributed the anticipated downturn to slowing GDP growth, persistent inflation, and potential disruptions from the Trump administration. To navigate this expected turbulence, Stifel recommended investing in conservative stocks less vulnerable to economic swings. Similar observations were made recently by Bill Stone from Glenview Trust, who recommended investing in conservative stocks from the healthcare and consumer-staples sectors for 2025.

Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.

For this article we scanned Insider Monkey’s database and picked 10 conservative (safe, reliable and defensive) stocks with the highest number of hedge fund investors. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A customer in a warehouse aisles, browsing the wide range of branded and private-label products.

Costco Wholesale Corporation (NASDAQ:COST)

Number of Hedge Fund Holders: 95  

Costco Wholesale Corporation (NASDAQ:COST) engages in the operation of membership warehouses. The firm exhibits characteristics typical of conservative stocks. For example, the membership model of the company has high renewal rates, allowing for a stable revenue stream. The revenue and earnings growth rival that of growth stocks, even though the firm operates in the non-cyclical consumer staples sector. The low beta value indicates that the firm can weather economic downturns better than other businesses, making it a top pick for a conservative stock portfolio. The firm recently announced January sales numbers, with total comparable sales of 7.5%, much ahead of the consensus estimate of 4.9%.

Overall, COST ranks 8th on our list of best stocks to invest in from conservative stock portfolio. While we acknowledge the potential of COST as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a 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.

 

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

 

Disclosure: None. This article is originally published at Insider Monkey.