Warren Buffett Passed on This Stock. Greg Abel May Not Wait Any Longer.

If I had to pick one stock worthy of Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) that former CEO Warren Buffett walked away from but current leader Greg Abel might eventually revisit, it would be Costco Wholesale (NASDAQ: COST). It checks almost every box in the Berkshire playbook: a durable moat, recurring revenue, disciplined management, and the ability to compound value quietly over very long stretches.

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Buffett's history with Costco is well known by now. Berkshire Hathaway owned shares for roughly two decades before selling out completely in 2020, a move vice chairman Charlie Munger openly disagreed with. In 2024 and 2025, Buffett admitted that dumping Costco was "probably a mistake," noting that the stock roughly doubled after Berkshire's exit and that he "used up" some of his good decisions between Costco and Apple. As of Berkshire's 13F filed March 31, Costco appears nowhere in its portfolio.

Costco has been on a tear

Costco's recent numbers look exactly like the kind of steady, member‑driven growth Berkshire tends to admire. For the third quarter of fiscal 2026, net sales rose 11.6% to $69.15 billion and total revenue, including membership fees, hit $70.53 billion. Net income climbed to $2.19 billion, or $4.93 per diluted share, up from $1.90 billion and $4.28 a year earlier.

That is not a one‑off spike. For the first 36 weeks of fiscal 2026, net sales were up 9.6% to $203.37 billion, while net income grew to $6.23 billion, or $14.01 per share, from $5.49 billion, or $12.34 per share.

The July 2026 sales update just reinforces the story. Costco reported net sales of $23.12 billion for the four weeks ending Aug. 2, up 10.7% year over year. Company‑wide comparable sales rose 8.9%, including 10.3% in the U.S., with digitally enabled sales up 17.7%. Excluding gasoline and foreign exchange, comps still rose 6.6% globally, with U.S. comps up 6.9% and digital up 18.2%. In other words, this is not just a gas‑price or currency story. It's about a business building traffic and ticket size across physical and online channels.

The real moat, of course, is membership. Costco recently disclosed renewal rates of 92.3% in the U.S. and Canada and 89.8% worldwide, meaning 9 out of 10 members keep paying their annual fees -- even after a fee increase took the standard Gold Star membership from $60 to $65 and the Executive membership from $120 to $130. That recurring, high‑margin membership income is exactly the kind of cash stream Buffett has always loved in insurance and other subscription businesses.

Berkshire is changing under Abel

So where does Greg Abel come in? Under Abel, Berkshire has been a bit more willing to lean into dominant consumer franchises and tech‑adjacent names when the economics are undeniable. Costco's current profile -- a global warehouse club with double‑digit sales growth, rising e‑commerce penetration, and near‑perfect renewal rates -- fits neatly into that framework. The model is simple to understand: offer a limited assortment of value‑priced goods, treat customers and employees well, and share economies of scale through low prices and modest membership-fee increases.

I don't think investors need to bet that Berkshire Hathaway will actually buy Costco shares again to see the opportunity. To me, the more useful lens is this: If you're trying to identify the kind of business that Abel might want to own for the next 20 years -- one with a wide moat, recurring cash, and management obsessed with value -- Costco Wholesale belongs near the top of the list. The fact that Buffett called selling it a mistake just strengthens the case that, this time around, Berkshire's new generation may be less inclined to let it get away.

Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Costco Wholesale. The Motley Fool has a disclosure policy.