Have PriceSmart Insiders Been Selling Stock?

Some PriceSmart, Inc. (NASDAQ:PSMT) shareholders may be a little concerned to see that the President & COO, John Hildebrandt, recently sold a substantial US$1.2m worth of stock at a price of US$115 per share. However, that sale only accounted for 8.1% of their holding, so arguably it doesn't say much about their conviction.

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PriceSmart Insider Transactions Over The Last Year

Notably, that recent sale by John Hildebrandt is the biggest insider sale of PriceSmart shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$117. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 8.1% of John Hildebrandt's holding.

Insiders in PriceSmart didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for PriceSmart

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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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. PriceSmart insiders own 7.5% of the company, currently worth about US$264m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About PriceSmart Insiders?

Insiders haven't bought PriceSmart stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. On the plus side, PriceSmart makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 1 warning sign for PriceSmart you should be aware of.

Of course PriceSmart may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.