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Easter is just a few days away and the Easter Alpha Bunny is looking for some golden eggs for his investment portfolio. After scouting the post recession landscape in search of a golden retailer, Alpha Bunny turned over a rock in Tennessee and found 3 golden eggs for his investment basket. As the savvy bunny investor peeled open the wrappers, he found that all 3 chocolate eggs were made up of necessity crafted ingredients with an infectious aroma of growth and earnings.

Dollar General (NYSE:DG)

Founded in 1968 and headquarted in Goodlettsville, TN, Dollar General has over 9,414 stores in 35 states. With a market cap of approximately 10.74 B, Dollar General has an extremely aggressive growth strategy. The necessity branded model has plans to open around 625 stores in 2011 (more than any US retailer). 2010 year-end revenues were $13.035 B, a 11% increase over 2009 results. In addition, net income for 2010 was $627,857 M, an increase of around 85%. The company’s long term debt is around $3.287 B and S&P upgraded the debt rating to BB last year (was BB-). The stock is trading at around $31.45 per share vs. $27.00 a year earlier – a 16.5% year over increase.

AutoZone (NYSE:AZO)

Founded in 1979 and headquartered in Memphis, TN, AutoZone has over 4,500 stores in all 50 states and Mexico. With a market cap of approximately 11.77 B, AutoZone has plans to open around 200 new stores in 2011. The “best in class” auto parts retailer reported 2010 sales of $ 7.362 B, a 11% increase over 2009. In addition, net income for 2010 was $738.31 M, an increase of 12% over 2009. The company’s long term debt is around $2.882 B and the S&P rating is BBB. The stock is trading at around $278.85 per share vs. $181.05 a year earlier – a 54% year over increase.

Tractor Supply (NASDAQ:TSCO)

Founded in 1938 and headquartered in Brentwood, TN, Tractor Supply has over 1,000 stores in 45 states (and projected to grow to 1,800 domestic build out). With a market cap of approximately $4.65 B, Tractor Supply plans to open around 75 stores in 2011. This 73 year old “feed & seed” retailer grew sales to a record $3.638 B in 2010 – an increase of 13% over 2009. In addition, the growing retailer reported record net income of $167,972 M - a year over year increase of around 40%. The company has very little long term debt (1.316 M); consequently, there is no S&P or Moody’s rating. The company’s stock is trading at around $63.89 and it was around $33.475 a year earlier (a 90.85% increase).

Retailer

Symbol

2010 Rev

2009 Rev

%

2010 Net

2009 Net

%

Dollar General

DG

13,035,000

11,796,380

11%

627,857

339,442

85%

AutoZone

AZO

7,362,618

6,816,824

8%

738,311

657,049

12%

Tractor Supply

TSCO

3,638,336

3,206,937

13%

167,972

119,745

40%

The Alpha Bunny remembered that he had invested $33,333 in each of the three retailers a year earlier (total of $100,000). The Alpha Bunny opened each of the eggs and found that these Tennessee grown eggs were now worth around $ 154,000 (around 54% profit – year over year). The Alpha Bunny knew that the ingredients were made up of the same necessity based products and that all were scaling growth at significant levels. Thrilled with his investment portfolio, the bunny settled down for a long nap as he dreamed of his SWAN (sleep well at night) strategy. Happy Easter!

Source: 3 Necessity Brand Retailers for the Easter Alpha Bunny