Dollar Tree, Inc (DLTR) is the largest and most successful single-price-point retailer in the country, operating thousands of stores in all 48 contiguous states and 9 distribution centers. Dollar Tree, Inc has grown earnings at a compounded growth rate of 17.1% since calendar year 1999. Like many retailers, Dollar Tree, Inc had become overvalued going into the summer of 2012. However, since that time, stock price has reconciled with earnings justified valuation, and therefore, we believe that Dollar Tree, Inc represents a solid long-term buy for investors seeking above-average growth.
This article is intended to look at Dollar Tree, Inc's "essential fundamentals at a glance" through the lens of the F.A.S.T. Graphs™ research tool. Therefore, rather than reinvent the wheel, we direct the readers to an article written by fellow Seeking Alpha Contributor: Dollar Tree: Profitability Analysis by Jeff Williams.
A Live F.A.S.T. Graphs™ on Dollar Tree, Inc
The F.A.S.T. Graphs™ on Dollar Tree, Inc illustrates that this blue-chip growth stock can be purchased at a sound valuation. Therefore, we rate Dollar Tree, Inc a buy based on the following fundamental metrics:
· a PE ratio of 17.1, which is in line with the company's historical earnings growth and its forecast future growth
· a price to sales ratio of 1.34, indicating that this growth stock is reasonably priced relative to its sales
· the company's healthy financial condition is a plus with debt of only 14% of capital and strong free cash flow generation
Moreover, in order to conduct your own research and get a clearer perspective on Dollar Tree, Inc's valuation, click on the picture above that links you to a fully functioning sample F.A.S.T. Graphs™ on Dollar Tree, Inc and research this high-quality large-cap growth stock deeper and faster.
(Click on this link or the picture above that will take you to a free, live, and fully functioning FAST Graphs™ on Dollar Tree, Inc. Run this "tool to think with" through its paces. Use the tan navigation bar to the left of the graphs and draw multiple graphs ranging from 2 to 20 years of history. Discover how this tool instantly provides a clear picture of the business behind the stock and dynamically re-evaluates valuation and reveals the clear correlation between the company's earnings and price.)
Note: This link will be live for 90 days beginning October 17, 2012. For more advanced instructions on how to utilize the live graph follow this link.
Summary & Conclusions
Dollar Tree, Inc is our mid-cap aggressive growth stock value idea of the week. At its current quotation, Dollar Tree, Inc is trading at what appears to be a fair valuation relative to its growth potential. This is a long-term call for investors seeking above-average capital appreciation that can be purchased at a reasonable price. Consequently, we believe this is an attractive growth candidate worthy of further due diligence.
Disclosure: No position at the time of writing.
Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.