PRICE SMART - good stock buy?

pasha

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The exerpt below is from Motley Fool's web site: www.fool.com

Is Price Smart doing well in the DR and would it be a good stock investment at the $6USD or so level?

I think someone mentioned in another thread that PS is a sub of Costco, but apparently not...or I misunderstood...or something.

Best, P

...............

The PriceSmart is right

PriceSmart (Nasdaq: PSMT) has been sent to the corner wearing a dunce cap. The warehouse club operator that you've never heard of (their 26 retail locations are located in Latin America, Asia, and the Caribbean) has seen its shares drop sharply. Over the last two years, the stock went from peaking past $40 to roughly $6 today. Sure, domestic warehouse clubs have had their hiccups as well, but PriceSmart also has had to deal with everything from currency devaluations in the Dominican Republic to political and economic uncertainties in many of its other markets.

With a double-digit slide in comps last month and a painful third-quarter loss, PriceSmart isn't looking so hot right now. But it's worth noting that the company had been consistently profitable until its recent debacle. BJS Wholesale Club (NYSE: BJ) and Costco (Nasdaq: COST) trade at price-to-sales multiples three to four times higher. PriceSmart isn't worthy of similar markups in its present state, naturally; however, it is an attractive buyout possibility for stateside operators looking to enter PriceSmart's emerging markets.
 

Hillbilly

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Jan 1, 2002
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the analysis seems right

I was at Price Smart yesterday (Saturday) morning at 10:30. It was busy, but not like a Kroger or Grand Union would be in the States. There was plenty of parking and the aisles were not jammed. There were only four cash registers operating. I saw a lot of friends there, but they were mostly professional people with some money to spend: Former ambasssador and now consul in a major city, an excellent MD, a couple of good engineers, and so forth. I also saw some scruffy looking foreigners there, germans or swiss(?) and a couple of women, who by their dress were certainly "not from around here."

My wife spent nearly RD$10,000 in her monthly spree (which used to be around RD$6,000), but it still saves us nearly RD$8,000 over daily purchases of the same foodstuffs. So the basic premise of the operation is accurate.

The talk of devaluation is right on. Until the currency market stabilizes at whatever level, and salaries and so forth are adjusted to that level, any business that relies on imports is going to get hurt. Of course, if they stick on another 5% import tax...things will get very bad.

Buy it? Why not? the business plan is good and eventually things will level out....

Hoping it stays here....

HB
 

Ruffino1974

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Jun 7, 2003
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well,
I was monitoring it today and even got a little taste. Guess what?

UP 6.3% for the day....

I never under estimate the power of DR1, but moving the prices of listed equities on a short post?

Must have had something to do with Hillbilly's endorsement.


Please e-mail me with "tips" in the future, prior to posting, and I promise to bring some of the profits to Santiago next visit, to invest in the local economy (beer).
 

pasha

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Ruffino1974 said:
well,
I was monitoring it today and even got a little taste. Guess what?
UP 6.3% for the day....
Keep an eye peeled....can only imagine that it would rise sharply if Costco were indeed interested in a buyout.

Best, P
 

Golo100

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Jan 5, 2002
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Price Mart stock

If you are so willing to invest in Price Mart stock, why dont you just get yourself a PriceMart Promerica certificate that pays over 20% a year just like I have now and risk it that way. Of course, if you invest just a little it wont hurt.

These certificates are available at their locations and can be cashed at their Avenida San Martin headquarters. They will pay you by check or cash at expiration, or automatic renewal.

TW
 

Ruffino1974

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Jun 7, 2003
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Golo,

Thanks for the information. I have been reading your posts since you were just a "Tourist Watcher" and clearly you are in tune with investment opportunities in the DR.
I have some fixed income investments, but the funds I invested were earmarked for equities. After doing some research, I determined that PSMT seemed to be a bargain. I bought some and watched it for two(2) days and sold it for a handsome 8% profit. Regardless of the amount, an 8% yield in two days is enough for me. In fact due to a market down turn today, which I am sure you are aware of, I'm back into PSMT.

I would appreciate any and all information as to investment opportunities available in the DR, that you would care to share.

I would love to pick your brain in person, and I am willing to do it over a bottle of wine of your choosing on my next trip to Sto Dgo.

I also would like to thank Pasha and Hillbilly and will make a trip to Santiago on my next visit to thank the local contingent in person. I intended to stop during my last visit, when I went to Sosua to visit Eddy, but in my defense I drove through Santiago at night and I missed it. It seems that the lights were out.
 

mondongo

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Jan 1, 2002
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adrianb, Pricemart does have a subsidiary in El Salvador. Promerica is a bank based (?) in El Salvador. Pricemart and Promerica have an alliance. My guess is that Pricemart issues these certificates through Promerica.
 

mondongo

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Jan 1, 2002
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Rufino, no offense to your stock picking/trading abilities....doing research......buying a stock.......then selling it 2 days later for an 8% return can be best described as very fortunate....I for one do not know of any fundamental analysis methods that call for 2 day trades....so....spill the beans....tell us how you did it!!!
 

pasha

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Sep 4, 2003
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Pasha is just now....

Ruffino1974 said:
Golo,

...I also would like to thank Pasha
in Germany on way to Berlin for a week or so. I agree that Golo and a few other guys always have good poop and want to shake hands at earliest opportunity.

Best, P
 

Ruffino1974

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Mondongo

You are absolutely correct. There is no way to predict any rapid appreciation of any stock, without inside information which I obviously didn't have. You are also correct that I was very fortunate to make such a large gain in so short a time. I committed the investment into that stock, with an eye toward a reasonable return. I was prepared to commit the time also, to allow for the appreciation, as any wise investor should. It was "fortunate" that I was able to get the return in two days. This is not common and I have no formula. Admittedly, I am a speculator. I try to limit my risk with market research and by speaking with people with insight into the buisness. That is why I thanked those who commented in this thread. Also, I believe it all investments involve some amount of instinct and are easier to commit to if you have and interest in the success of the project/company in which you are investing,beyond financial gain.
I know my future lies in the DR and anytime I can commit my present actions toward that goal it fills a time gap for me. This is one of the reasons that I monitor this board regularly, even taking time from a hectic schedule.
I know you regularly comment on financial issues, though I don't know your background. If you or any other poster can offer the names of any listed companies with significant interest in the DR I, and I am sure others, would appreciate it. Maybe we can use the vast expierience of those on this board to make a couple of dollars for our future or at the least help the local economy by creating/keeping jobs in a time of economic difficulties.


PS. No offense taken
 
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lhtown

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Jan 8, 2002
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As a stock, PSMT is dirt cheap. I believe it has real potential and overall, a very workable business model. What it seems to have lacked is good leadership in management. Since the last CEO left suddenly several months ago, things appear to have gotten better. Even assuming that PSMT gets its act together on a corporate level, I would imagine that it will always struggle with finding good management on the local level. Who knows, perhaps it will find a solution. If it does, it could be a smashing success. Then again, the stock could collapse dwindling to $0.00. I see it as a long term buy, but definitely not a place for a large part of your portfolio.

Disclaimer: I do own shares in PSMT
 

Ruffino1974

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Jun 7, 2003
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Answer to an old question....

Well sort of...

with all the talk and threads about Pricesmart..I was reminded that I bought the stock on advice from some members..well...we have our answer to this thread..

I have gotten in and out a few times with some quantities..and have been happy with the activity..and made a few pesos.

If anyone would have bought some for the long term, as some DR1 experts suggested, when we began disucussing the stock or watched it for a buying opportunity like I did, and held it till today, they would have made between 30 to 40 percent on their investment, less their costs.

So I said maybe we have an answer...For me it was a good investment, so the answer was yes, for me....I know some people say They could have done this or that and could have gotten a return of this much or that much...well I never made any money saying could have...so I will say thanks to those who brought this stock to my attention..and the Santiago contingent, has another cold one coming if i can get my butt out of Santo Domingo...

Mondongo..i hope you were buying and not just analyzing and commenting...

Just more positive proof of how DR1 can make your life better.

thanks,
Rich
 

Ruffino1974

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Jun 7, 2003
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For anyone else thats still invested..what now?

For anyone who took the advice of some of the regulars on the board and bought pricemart...what to do?..what to do?

For anyone who is curious...at the time of this posting PSMT is up 23% for the day and for those of us that bought after the recommendation of the board members we are up over 90% on our investment..

Better then their 20% certificates and alot better than those bogus Central Bank Notes...if they are worth anything at all..

Thanks again guys and DR1..

The question now is..what to do? So, hillbilly been shopping lately? How are the lines at the store? Think im gonna sell and invest in Cervesa Nacional...maybe a few pequenos at at time...cant go wrong there.

Rich
 
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Ruffino1974

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Jun 7, 2003
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Just a update after some movement and milestones.

PSMT Hit a new high today $19.27..up 8.16 % for the day..

For those of us who bought when this thread started and held..we are up a whopping 208%...hmmm...hold or sell??????

Keep on shopping....

Rich