Anyone interested in PriceSmart, Inc. (NASDAQ:PSMT) should probably be aware that the Executive VP, David Price, recently divested US$254k worth of shares in the company, at an average price of US$92.24 each. On the bright side, that sale was only 2.7% of their holding, so we doubt it's very meaningful, on its own.
PriceSmart Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Director, Sherry Bahrambeygui, for US$2.0m worth of shares, at about US$89.81 per share. That means that even when the share price was slightly below the current price of US$90.19, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 22% of Sherry Bahrambeygui's holding.
PriceSmart insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Insider Ownership Of PriceSmart
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. PriceSmart insiders own about US$224m worth of shares (which is 8.3% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At PriceSmart Tell Us?
Insiders sold PriceSmart shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since PriceSmart is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 1 warning sign for PriceSmart you should be aware of.
But note: PriceSmart may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
