PriceSmart

I have liked this for a bit. Figured I would put it up here for everyone to poke holes in. It had a very strong year last year, took a bit of a break earlier this year and ramped up again recently. Basically:

  • Taking the Costco concept to the Carribean and Latin America.

  • Have been running comps in the mid/high teens.

  • Last quarter reported 18% membership growth.

  • Starting to move into the Columbian market, which could double their existing store growth.

  • You can actually buy Kirkland products in the stores, so Costco is the supplier. Seems like a natural strategic acquisition for Costco, should they want to expand more globally.

http://www.pricesmart.com/Investor/

Good company. What is your intrinsic value estimate though?

Conservative balance sheet recap taking debt from 86mm to about 500mm using 5% growth on TTM EBIT, 7% cost of debt, 10% cost of equity gets me to about $110. Recap valuation is what got me interested in the first place as they have very low levels of debt.