Pricesmart (PSMT) Weak On High Volume Today

Trade-Ideas LLC identified Pricesmart (PSMT) as a weak on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Pricesmart

(

PSMT

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Pricesmart as such a stock due to the following factors:

  • PSMT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.2 million.
  • PSMT has traded 169,553 shares today.
  • PSMT is trading at 8.23 times the normal volume for the stock at this time of day.
  • PSMT is trading at a new low 10.05% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on PSMT:

PriceSmart, Inc. owns and operates membership shopping warehouse clubs in the United States, Central America, Caribbean, and Colombia. The company's warehouse clubs offer brand name and private label consumer goods to individuals and businesses. The stock currently has a dividend yield of 0.7%. PSMT has a PE ratio of 31. Currently there are 2 analysts that rate Pricesmart a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Pricesmart has been 127,300 shares per day over the past 30 days. Pricesmart has a market cap of $2.9 billion and is part of the services sector and retail industry. The stock has a beta of 1.75 and a short float of 7.4% with 9.77 days to cover. Shares are up 10.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Pricesmart as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:

  • PSMT's revenue growth has slightly outpaced the industry average of 0.9%. Since the same quarter one year prior, revenues slightly increased by 3.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Food & Staples Retailing industry average. The net income increased by 4.5% when compared to the same quarter one year prior, going from $24.84 million to $25.94 million.
  • Net operating cash flow has significantly increased by 162.29% to $67.70 million when compared to the same quarter last year. In addition, PRICESMART INC has also vastly surpassed the industry average cash flow growth rate of 33.77%.
  • PSMT's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that PSMT's debt-to-equity ratio is low, the quick ratio, which is currently 0.57, displays a potential problem in covering short-term cash needs.
  • PRICESMART INC's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PRICESMART INC reported lower earnings of $2.95 versus $3.07 in the prior year. This year, the market expects an improvement in earnings ($3.10 versus $2.95).

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