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Two Executives of This Subscription Warehouse Club Sold Shares Last Week

PriceSmart Inc. (NASDAQ:PSMT) had two influential officers sell shares this past week. To begin with, Executive Vice President and Chief Financial Officer John M. Heffner unloaded 3,266 shares on Thursday at prices that ranged from $84.79 to $84.81 per share, trimming his overall holding to 34,886 shares. In the meantime, Executive Vice President and Chief Merchandising Officer, Thomas D. Martin, discarded 1,355 units of common stock two days earlier for $81.54 apiece, which reduced his ownership to 44,322 units.

PriceSmart’s business operations involve international membership shopping warehouse clubs, with the company having 38 such clubs in operation in 12 countries and one U.S. territory: six each in Costa Rica and Colombia; five in Panama; three each in Guatemala, Honduras, and the Dominican Republic, two each in El Salvador and Nicaragua, and one each in Aruba, Barbados, Jamaica, and the United States Virgin Islands. The company’s net warehouse club sales for the second quarter of fiscal year 2016 that ended February 29 increased by 3.7% year-over-year to $758.99 million. The increase was driven by the addition of one warehouse club in Panama and one in Nicaragua, as well as one additional day of sales (February 29). All countries registered year-over-year growth in sales in the second quarter, save for Colombia. Net warehouse sales generated in Colombia dropped by 32.1% year-over-year due to a 37.8% devaluation of the Colombian peso (COP) against the green buck. Fiscal second quarter net warehouse sales growth was mainly attributable to a 6.4% increase in transactions, which was somewhat offset by a decrease in average ticket. Net income increased to $25.94 million from $24.84 million reported for the second quarter of fiscal year 2015.

The number of money managers in our system with stakes in the subscription warehouse club declined to eight from 12 during the December quarter. Shares of PriceSmart have advanced by 2% since the beginning of 2016 and are up by 7% in the past 12 months. The stock trades at a forward P/E ratio of 24.4, which is significantly above the ratio of 18.5 for the companies included in the S&P 500. Murray Stahl’s Horizon Asset Management cut its stake in PriceSmart Inc. (NASDAQ:PSMT) by 14% during the March quarter to 6,069 shares.

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