NEW YORK, May 29 (Reuters) - Shares in PriceSmart Inc could be worth $80 in the next few years as the membership-based retail chain expands into new countries including Colombia, according to a story in Barron's May 30 edition.
While its price-to-earnings ratio of 18 is in line with U.S. counterparts like Costco Wholesale Corp and BJ's Wholesale Club, PriceSmart's earnings are increasing much faster than those companies, the Barron's report said..
San Diego-based PriceSmart, which is the Caribbean's largest operator of warehouse stores, could afford to open three new stores a year based on its $35 million annual free cash flow, according to estimates from David Hodgson, a portfolio manager with Toronto-based Gluskin Sheff, Barron's reported.
Assuming that the company does open three new stores a year over the next few years the stock could ultimately be worth $80 a share, Hodgson told Barron's. PriceSmart shares on Friday closed at $42.72 on the Nasdaq.
The story noted that periodic rumors about a potential acquisition by Costco would require support from the Price family, which has a large stake and has publicly expressed no interest in such a transaction.
(Reporting by Sinead Carew; Editing by Leslie Adler) Keywords: PRICESMART/ (sinead.carew@thomsonreuters.com + 1 646 2236186) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
While its price-to-earnings ratio of 18 is in line with U.S. counterparts like Costco Wholesale Corp and BJ's Wholesale Club, PriceSmart's earnings are increasing much faster than those companies, the Barron's report said..
San Diego-based PriceSmart, which is the Caribbean's largest operator of warehouse stores, could afford to open three new stores a year based on its $35 million annual free cash flow, according to estimates from David Hodgson, a portfolio manager with Toronto-based Gluskin Sheff, Barron's reported.
Assuming that the company does open three new stores a year over the next few years the stock could ultimately be worth $80 a share, Hodgson told Barron's. PriceSmart shares on Friday closed at $42.72 on the Nasdaq.
The story noted that periodic rumors about a potential acquisition by Costco would require support from the Price family, which has a large stake and has publicly expressed no interest in such a transaction.
(Reporting by Sinead Carew; Editing by Leslie Adler) Keywords: PRICESMART/ (sinead.carew@thomsonreuters.com + 1 646 2236186) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.