October 31, 2012
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Latin American price-club retailer PriceSmart (Nasdaq: PSMT ) jumped as much as 11% today, before finishing up 6%, on a promising earnings report.
So what: Sales for the Costco-style business climbed 15% to $515 million, while EPS jumped 38%, to $0.58 per share, from $0.42. Those figures beat estimates of $0.53 per share in profits, and $507 million in revenues. PriceSmart also opened up its second store in Colombia, and its thirtieth overall, just last week in Cali.
Now what: With the big-box membership model that's worked so well for Costco, and an entire continent to expand into, the future appears to look bright for PriceSmart. The stock has gone up about 30% this year, and with a P/E of 37, is not outrageously priced, considering the long-term growth opportunity. In fact, PriceSmart was named by our Chief Investment Officer as his top stock for 2012. Find out why by clicking right here.