Disclosed on July 9, Francisco Velasco, EVP at Pricesmart PSMT, executed a substantial insider sell as per the latest SEC filing.
What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday outlined that Velasco executed a sale of 550 shares of Pricesmart with a total value of $58,470.
At Thursday morning, Pricesmart shares are up by 0.1%, trading at $102.11.
Delving into Pricesmart’s Background
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 the Caribbean, Costa Rica, Panama, and other regions. The company’s revenue consists of net warehouse club sales from merchandise sales, membership income from annual membership fees, export sales, and other income. Its operations consist of four reportable segments; Central America, the Caribbean, Colombia, and the United States. A majority of the company’s revenue is derived from Central America.
A Deep Dive into Pricesmart’s Financials
Positive Revenue Trend: Examining Pricesmart’s financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 5.57% as of 28 February, 2025, showcasing a substantial increase in top-line earnings. When compared to others in the Consumer Staples sector, the company excelled with a growth rate higher than the average among peers.
Key Insights into Profitability Metrics:
-
Gross Margin: The company shows a low gross margin of 17.14%, suggesting potential challenges in cost control and profitability compared to its peers.
-
Earnings per Share (EPS): Pricesmart’s EPS is below the industry average. The company faced challenges with a current EPS of 1.45. This suggests a potential decline in earnings.
Debt Management: Pricesmart’s debt-to-equity ratio is below the industry average at 0.2, reflecting a lower dependency on debt financing and a more conservative financial approach.
Valuation Metrics: A Closer Look
-
Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 21.75, the stock indicates an attractive valuation, potentially presenting a buying opportunity.
-
Price to Sales (P/S) Ratio: With a P/S ratio of 0.6 below industry standards, the stock shows potential undervaluation, making it an appealing investment option for those focusing on sales performance.
-
EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Pricesmart’s EV/EBITDA ratio at 10.52 suggests potential undervaluation, falling below industry averages.
Market Capitalization: With restricted market capitalization, the company is positioned below industry averages. This reflects a smaller scale relative to peers.
Now trade stocks online commission free with Charles Schwab, a trusted and complete investment firm.
Why Insider Activity Matters in Finance
Insider transactions contribute to decision-making but should be supplemented by a comprehensive investment analysis.
From a legal standpoint, the term “insider” pertains to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.
A company insider’s new purchase is a indicator of their positive anticipation for a rise in the stock.
While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.
Transaction Codes To Focus On
For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
Check Out The Full List Of Pricesmart’s Insider Trades.
Insider Buying Alert: Profit from C-Suite Moves
Benzinga Edge reveals every insider trade in real-time. Don’t miss the next big stock move driven by insider confidence. Unlock this ultimate sentiment indicator now. Click here for access.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
