Pricesmart EVP & CFO Sold $350K In Company Stock

Michael McCleary, EVP & CFO at Pricesmart PSMT, disclosed an insider sell on July 24, according to a recent SEC filing.

What Happened: McCleary's decision to sell 4,000 shares of Pricesmart was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total value of the sale is $350,044.

Monitoring the market, Pricesmart's shares down by 0.0% at $86.18 during Thursday's morning.

About Pricesmart

Pricesmart Inc is principally engaged in operating U.S.-style membership shopping warehouse clubs that offer consumer goods at low prices. The company is headquartered in San Diego, California, United States, and operates stores in Latin America and the Caribbean, with Central America contributing over half of its net warehouse club sales. The company's revenue consists of net warehouse club sales from merchandise sales, membership income from annual membership fees, export sales, and other income, with net warehouse club sales accounting for the majority of the company's total revenue.

Unraveling the Financial Story of Pricesmart

Revenue Growth: Pricesmart displayed positive results in 3 months. As of 31 May, 2024, the company achieved a solid revenue growth rate of approximately 12.11%. This indicates a notable increase in the company's top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Consumer Staples sector.

Holistic Profitability Examination:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 17.06%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): Pricesmart's EPS is notably higher than the industry average. The company achieved a positive bottom-line trend with a current EPS of 1.08.

Debt Management: Pricesmart's debt-to-equity ratio is below the industry average at 0.24, reflecting a lower dependency on debt financing and a more conservative financial approach.

Financial Valuation:

• Price to Earnings (P/E) Ratio: The P/E ratio of 20.96 is lower than the industry average, implying a discounted valuation for Pricesmart's stock.

• Price to Sales (P/S) Ratio: The P/S ratio of 0.54 is lower than the industry average, implying a discounted valuation for Pricesmart's stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a below-average EV/EBITDA ratio of 9.43, Pricesmart presents an opportunity for value investors. This lower valuation may attract investors seeking undervalued opportunities.

Market Capitalization Analysis: Falling below industry benchmarks, the company's market capitalization reflects a reduced size compared to peers. This positioning may be influenced by factors such as growth expectations or operational capacity.

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Why Insider Transactions Are Important

Considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

Exploring the legal landscape, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated by Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and major hedge funds. These insiders are required to report their transactions through a Form 4 filing, which must be submitted within two business days of the transaction.

Highlighted by a company insider's new purchase, there's a positive anticipation for the stock to rise.

But, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Cracking Transaction Codes

Taking a closer look at transactions, investors often prioritize those unfolding in the open market, meticulously cataloged in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A signifies a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Pricesmart's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.