Wednesday, March 20, 2013

Why PriceSmart Is Poised to Pop

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, PriceSmart (NASDAQ: PSMT  ) , which operates shopping warehouse clubs in Latin America and the Caribbean, has earned a coveted five-star ranking.

With that in mind, let's take a closer look at PriceSmart and see what CAPS investors are saying about the stock right now.

PriceSmart facts

Headquarters (founded)

San Diego, Calif. (1994)

Market Cap

$2.2 billion

Industry

Hypermarkets and supercenters

Trailing-12-Month Revenue

$2.1 billion

Management

CEO Jose Laparte (since 2010)

CFO John Heffner (since 2004)

Return on Equity (average, past 3 years)

17%

Cash/Debt

$84.4 million/$82.4 million

Dividend Yield

0.8%

Competitors

Carrefour

IGA

Wal-Mart Stores (NYSE: WMT  )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 511 members who have rated PriceSmart believe the stock will outperform the S&P 500 going forward.

Earlier this month, one of those Fools, CostaRicanGringo, offered some valuable insight into the PriceSmart opportunity:

I live in Costa Rica and understand what PriceSmart is to the [L]atin market. EVERY day, literally EVERY DAY, there is a line out the door to open, the parking lots stay full ALL DAY LONG until closing. Not to mention that personally it is one of the only places I can buy things and not feel like I am paying through my nose in [Value Added Tax], which is common in Latin America. The business model is sound, the leadership is who made the business model to begin with (Price, et al), and there are plenty of green field growth opportunities on this one. Just compare their fundamentals to industry averages ... it's all there.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a perfect five-star rating, PriceSmart may not be your top choice.

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

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