Pricesmart Story

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PSMT -- USA Stock  

USD 89.77  0.51  0.57%

Pricesmart is scheduled to announce its earnings today. Pricesmart Working Capital is comparatively stable at the moment as compared to the past year. Pricesmart reported Working Capital of 130.19 Million in 2020. Interest Coverage is likely to gain to 32.41 in 2021, whereas Invested Capital is likely to drop slightly above 415.5 M in 2021. Although many aggressive traders are getting into consumer defensive space, Pricesmart may or may not be your first choice. We will break down if it could be a much better year for Pricesmart shareholders.
Published over a week ago
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Should I short my Pricesmart (NASDAQ:PSMT) holdings?
This firm currently holds 313.58 M in liabilities with Debt to Equity (D/E) ratio of 0.36, which is about average as compared to similar companies.
The company holds a Beta of 0.1718, which implies not very significant fluctuations relative to the market. Let's try to break down what Pricesmart's beta means in this case. As returns on the market increase, Pricesmart returns are expected to increase less than the market. However, during the bear market, the loss on holding Pricesmart will be expected to be smaller as well. Even though it is essential to pay attention to Pricesmart current trending patterns, it is always good to be careful when utilizing equity existing price patterns. Our philosophy towards forecasting any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. Pricesmart exposes twenty-eight different technical indicators, which can help you to evaluate its performance. Pricesmart has an expected return of -0.0443%. Please be advised to check Pricesmart treynor ratio, as well as the relationship between the expected short fall and day median price to decide if Pricesmart stock performance from the past will be repeated at some point in the near future.
Pricesmart financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Pricesmart, including all of Pricesmart's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Pricesmart assets, the company is considered highly leveraged. Understanding the composition and structure of overall Pricesmart debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.
Please read more on our technical analysis page.

Understanding Pricesmart Total Liabilities

Pricesmart liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Pricesmart has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Pricesmart balance sheet include debt obligations and money owed to different Pricesmart vendors, workers, and loan providers. Below is the chart of Pricesmart short long-term liabilities accounts currently reported on its balance sheet.
You can use Pricesmart financial leverage analysis tool to get a better grip on understanding its financial position

How important is Pricesmart's Liquidity

Pricesmart financial leverage refers to using borrowed capital as a funding source to finance Pricesmart ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Pricesmart financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Pricesmart's total debt and its cash.

Breaking it down

The small drop in market price for the last few months may encourage private investors to take a closer look at the company as it is trading at a share price of 95.66 on 62,700 in trading volume. The company directors and management did not add much value to Pricesmart investors in March. However, diversifying your holdings with Pricesmart or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 30 days investing horizon is currently 1.77. The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.

Asset Breakdown

420 M
Assets Non Current
515.2 M
Current Assets
Total Assets1.21 Billion
Current Assets515.16 Million
Assets Non Current419.96 Million
Goodwill30.43 Million
Tax Assets13.37 Million

Analysis of Pricesmart

Pricesmart newest treynor ratio boosts over 0.62.
As of the 8th of April, Pricesmart holds the Risk Adjusted Performance of 0.0593, coefficient of variation of 1562.79, and Semi Deviation of 1.61. Compared to fundamental indicators, the technical analysis model allows you to check existing technical drivers of Pricesmart, as well as the relationship between them. Put it differently, you can use this information to find out if the company will indeed mirror its model of past market data, or the prices will eventually revert. We have collected data for nineteen technical drivers for Pricesmart, which can be compared to its competitors. Please check Pricesmart downside deviation, treynor ratio, as well as the relationship between the Treynor Ratio and expected short fall to decide if Pricesmart is priced some-what accurately, providing market reflects its current price of 95.66 per share. Given that Pricesmart has jensen alpha of 0.0839, we recommend you to check out Pricesmart's recent market performance to make sure the company can sustain itself at a future point.

Whereas some other entities in the discount stores industry are either recovering or due for a correction, Pricesmart may not be performing as strong as the other in terms of long-term growth potentials. With a relatively neutral outlook on the newest economy, it is better to hold off any trading of Pricesmart as the current risk-reward utility is not appealing enough. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Pricesmart.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Achuva Shats do not own shares of Pricesmart. Please refer to our Terms of Use for any information regarding our disclosure principles.

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