Benzinga - by Benzinga Insights, Benzinga Staff Writer.
A substantial insider sell was reported on May 16, by Sherry Bahrambeygui, Director at Pricesmart (NASDAQ:PSMT), based on the recent SEC filing.
What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Thursday showed that Bahrambeygui sold 11,022 shares of Pricesmart. The total transaction amounted to $947,776.
As of Thursday morning, Pricesmart shares are down by 0.0%, currently priced at $86.06.
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 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.
Pricesmart: A Financial Overview Revenue Growth: Pricesmart's remarkable performance in 3 months is evident. As of 29 February, 2024, the company achieved an impressive revenue growth rate of 13.11%. This signifies a substantial 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.
Interpreting Earnings Metrics:
- Gross Margin: The company shows a low gross margin of 17.11%, suggesting potential challenges in cost control and profitability compared to its peers.
- Earnings per Share (EPS): Pricesmart's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 1.31.
Understanding Financial Valuation:
- Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 21.68, the stock indicates an attractive valuation, potentially presenting a buying opportunity.
- Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 0.56, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.
- EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a below-average EV/EBITDA ratio of 9.63, Pricesmart presents an opportunity for value investors. This lower valuation may attract investors seeking undervalued opportunities.
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Why Insider Activity Matters in Finance Insider transactions shouldn't be used primarily to make an investing decision, however, they can be an important factor for an investor to consider.
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.
Breaking Down the Significance of Transaction Codes When dissecting transactions, the focal point for investors is often those occurring in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates 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.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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