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PriceSmart, Inc. (PSMT): Are Hedge Funds Right About This Stock?

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What’s a smart PriceSmart, Inc. (NASDAQ:PSMT) investor to do?

In the eyes of many of your fellow readers, hedge funds are viewed as bloated, old financial tools of an era lost to time. Although there are more than 8,000 hedge funds in operation today, this site focuses on the aristocrats of this group, around 525 funds. Analysts calculate that this group has its hands on the majority of the hedge fund industry’s total assets, and by paying attention to their highest quality investments, we’ve discovered a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Just as key, positive insider trading sentiment is another way to analyze the financial markets. Obviously, there are plenty of reasons for an upper level exec to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this strategy if investors understand where to look (learn more here).

PriceSmart, Inc. (NASDAQ:PSMT)

Now that that’s out of the way, we’re going to discuss the newest info about PriceSmart, Inc. (NASDAQ:PSMT).

Hedge fund activity in PriceSmart, Inc. (NASDAQ:PSMT)

At Q2’s end, a total of 6 of the hedge funds we track held long positions in this stock, a change of -14% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially.

When using filings from the hedgies we track, Matthew Hulsizer’s PEAK6 Capital Management had the biggest call position in PriceSmart, Inc. (NASDAQ:PSMT), worth close to $2.9 million, comprising less than 0.1%% of its total 13F portfolio. On PEAK6 Capital Management’s heels is Ken Griffin of Citadel Investment Group, with a $0.9 million call position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include Cliff Asness’s AQR Capital Management, Glenn Russell Dubin’s Highbridge Capital Management and Panayotis Sparaggis’s Alkeon Capital Management.

Due to the fact PriceSmart, Inc. (NASDAQ:PSMT) has experienced dropping sentiment from the smart money’s best and brightest, logic holds that there lies a certain “tier” of hedge funds that slashed their full holdings last quarter. It’s worth mentioning that Jim Simons’s Renaissance Technologies said goodbye to the biggest investment of the 450+ funds we watch, comprising an estimated $0.9 million in stock, and Matthew Hulsizer of PEAK6 Capital Management was right behind this move, as the fund dropped about $0.4 million worth. These moves are important to note, as aggregate hedge fund interest fell by 1 funds last quarter.

What have insiders been doing with PriceSmart, Inc. (NASDAQ:PSMT)?

Insider buying is at its handiest when the company in focus has seen transactions within the past six months. Over the last 180-day time period, PriceSmart, Inc. (NASDAQ:PSMT) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators 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 belong to the discount, variety stores industry and their market caps resemble PSMT’s market cap.

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