I am probably a little naive but I am surprised by the size of PSMT's drop today. It has seemed to hold up pretty well during the recent volatile markets. What is different about today? I don't think PSMT's markets are all that directly linked to the US economy. Even if they are, a recession would seem to push more people to save money through avenues like PSMT. I don't completely understand currency exchange rates, but most currencies are strengthening vs the dollar so wouldn't this effectively lower the cost of US products? It seems to me that the current economic environment both in the US and globally would cause more revenues for PSMT from cost conscious consumers and continue the company's growth. Please shoot me down if it is called for because I want to better understand what drives this stock's price.
It seems to me that PSMT is dependant on the US economy because most of the countries they are in are tied closely to the US. They all sell tourism or goods to the US. PSMT does not export US goods to other countries so is not dependant on the US currency.. PSMT resells goods made in China..just like WMT and Costco. PSMT is an efficient transfer station with a small mark-up and the real profit lies in the Membership dues...
IMHO most of the people on this BB who have a position in PSMT (myself included) seem to be aware of the history of this company; who Sol Price was; and the history of Price Club & Costco, etc. We all recognize that PSMT is in an earlier state of high growth, compared to the much larger Costco.
The rest of the investor population, perhaps, may think PSMT is an foreign company because of its off shore operation, when in fact it's headquarters are based in the USA, in San Diego.
It merely "flying under the radar", so enjoy the opportunity of discovering it before it gets well known stateside.
Wow, quite a jump today for PSMT (and all US markets). Any news that I am not aware of? We have earned our $.30/share dividend which will be paid on 8/31/11. Like usual, I don't understand the rally today. Reported reasons for the upswing: Irene didn't cause as much damage as expected so insurers are up (did they take us down the last few weeks?). 2 stressed Greek Banks merge to make 1 large stressed bank (my sentiment). Buffett bets on BoA (mini bailout). I don't see how these things justify today's action. Compared to our slowing economy, high unemployment with dismal job creation, German economic slowdown which might be a harbinger (I always wanted to use that word) of global economic slowdown, all seem to dwarf the 'positives' we had today. (I don't mean to minimize the impact of hurricane Irene or lives and property lost. I am very happy things did not go a lot worse.) I am fearful that Thursday's ISM report will confirm lower production and Friday's Labor Department jobs report will confirm no progress in jobs creation. How will the markets react to those reports? I'm buckled in for a bumpy ride.
I believe your assumptions are correct. They have helped make PSMT what it is today. At the present time I believe the biggest negative for PSMT is it's more than a 100% jump in less than one year. It was terribly undervalued. It would seem that the majority of today's action was from some investors locking in their profits and some others shorting the stock. Technically it appears to a good prospect for shorting especially in the present market. Fundamentially though it's a different story. All the numbers are rock solid so only time will tell. PSMT's numbers will definitely support a PE near 30 or even a little higher. They have little debt and a solid cash position. If this down draft continues we could test 50 or a little lower. If so it would a great buy. There is an old saying on Wall Street that still holds true today," When they raid the whore house everyone gets arrested".