Is PriceSmart, Inc. (NASDAQ:PSMT) worth your attention right now? Prominent investors are reducing their bets on the stock. The number of bullish hedge fund bets shrunk by 1 recently.
To the average investor, there are plenty of gauges market participants can use to analyze publicly traded companies. A pair of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can trounce the S&P 500 by a very impressive margin (see just how much).
Equally as important, bullish insider trading sentiment is another way to break down the financial markets. Just as you’d expect, there are many stimuli for an upper level exec to downsize shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the impressive potential of this method if investors know where to look (learn more here).
With all of this in mind, let’s take a peek at the recent action encompassing PriceSmart, Inc. (NASDAQ:PSMT).
How are hedge funds trading PriceSmart, Inc. (NASDAQ:PSMT)?
At year’s end, a total of 7 of the hedge funds we track were bullish in this stock, a change of -13% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully.
According to our comprehensive database, Richard Driehaus’s Driehaus Capital had the biggest position in PriceSmart, Inc. (NASDAQ:PSMT), worth close to $8.6 million, accounting for 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $4.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Cliff Asness’s AQR Capital Management, and Andy Redleaf’s Whitebox Advisors.
Judging by the fact that PriceSmart, Inc. (NASDAQ:PSMT) has witnessed a declination in interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedge funds that slashed their full holdings at the end of the year. At the top of the heap, D. E. Shaw’s D E Shaw dumped the biggest investment of the 450+ funds we track, worth an estimated $0.9 million in call options, and Joel Greenblatt of Gotham Asset Management was right behind this move, as the fund sold off about $0.5 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 1 funds at the end of the year.
What do corporate executives and insiders think about PriceSmart, Inc. (NASDAQ:PSMT)?
Bullish insider trading is particularly usable when the company in focus has seen transactions within the past half-year. Over the latest half-year time period, PriceSmart, Inc. (NASDAQ:PSMT) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to PriceSmart, Inc. (NASDAQ:PSMT). These stocks are Dollar General Corp. (NYSE:DG), Fred’s, Inc. (NASDAQ:FRED), Dollar Tree, Inc. (NASDAQ:DLTR), Family Dollar Stores, Inc. (NYSE:FDO), and Big Lots, Inc. (NYSE:BIG). This group of stocks are the members of the discount, variety stores industry and their market caps are similar to PSMT’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Dollar General Corp. (NYSE:DG) | 44 | 3 | 9 |
| Fred’s, Inc. (NASDAQ:FRED) | 4 | 0 | 2 |
| Dollar Tree, Inc. (NASDAQ:DLTR) | 39 | 1 | 2 |
| Family Dollar Stores, Inc. (NYSE:FDO) | 26 | 0 | 7 |
| Big Lots, Inc. (NYSE:BIG) | 19 | 0 | 0 |
With the results shown by the aforementioned research, everyday investors must always monitor hedge fund and insider trading activity, and PriceSmart, Inc. (NASDAQ:PSMT) applies perfectly to this mantra.
