It is hard to believe, but this little retailer is actually up 130% over the past year in a very poor retail environment. When I saw this I had to investigate further, and I was quite impressed with what I found. It operates in a terrific growth area, and I believe this company has years of growth ahead of it. Here are some other things I like about PriceSmart Inc. (PSMT).
The company owns and operates warehouse clubs in the United States, Latin America, and the Caribbean. Its warehouse clubs sell consumer goods and perishable foods at low prices to individuals and businesses, as well as offers ancillary services, which include food courts, tire centers, and photo centers. As of August 31, 2010, the company operated 27 warehouse clubs in 11 countries and 1 U.S. territory.
Baby Costco
I think optimistically, this company could become a small version of Costco (COST) or Wal-Mart (WMT) in the Caribbean. The warehouse concept is a proven winner here at home and Latin America and the Caribbean are strong growth markets with growing middle classes. Members per club and spending per member is growing nicely at their stores in these regions.
With a market cap of just $2 billion, I think there is ample opportunity for this company to grow. It recently opened its first store in Colombia to much fanfare, which shows that South America is another strong growth opportunity for the company. Economic growth is still running relatively strong in this area.
I like the balance sheet with marginal debt and an ROE over 18%. The earnings estimate revision picture is strong as well. Over the past 60 days, 2012 estimates have increased 21 cents to $2.61 per share. Additionally, the company has posted an average surprise of 15.2% over the past four quarters.
The stock is not particularly cheap, but a growth company with these prospects deserves to trade at a premium. It is trading at 25.5x forward estimates, but I believe that the company will grow into those valuations. This is a long-term growth story and should be picked up on any dips.
Another Small Cap Retailer On The Rise is an article from: 
