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Jim Van Meerten
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Jim Van Meerten is an advisor to Marketocracy Capital Management and writes on financial subjects here and on Barchart Portfolio Blogs and Seeking Alpha. He earned a BS in Accounting and Business Administration from Berry College; a Juris Doctorate from the Woodrow Wilson School of Law; and... More
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Marketocracy Capital Management
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  • Money grows on Dollar Trees 0 comments
    May 21, 2011 12:36 PM | about stocks: DLTR
     I like to screen on Barchart to find growth stocks that are moving in the current market.  With 12 new highs and up by 8.30% in the last month Dollar Tree (NASDAQ:DLTRdeserves a look.

     
    Dollar Tree Stores, Inc (DLTR) is an operator of discount variety stores offering merchandise at a fixed price point of $1.00 or less. Its stores successfully operate in major metropolitan areas, mid-sized cities and small towns and perform well in a variety of locations. They offer a wide range of quality everyday general merchandise in many categories, including housewares, seasonal goods, candy and food, toys, health and beauty care, gifts, party goods, stationery, books, personal accessories, and other consumer items.
     
    Right now they have around 4,100 stores but have a goal of 7,000 by the end of the decade.  300 stores will be added this year and 75 of the old ones will either be expanded or relocated.  Most of the items are prepackaged dry goods but management intends to add coolers and freezer to a lot of the stores in the future.
     
    In addition to its aggressive expansion program, since 2003 they have had a stock buy back program that has bought back almost 25% of the outstanding stock and still has a way to go.
     
    Factors to Consider:
     
    Technical Factors:
     
    • 96% Barchart technical buy signals
    • Trend Spotter buy signals
    • Above its 20, 50 and 100 day moving averages
    • 12 new highs and up 8.30% in the last month
    • Relative Strength Index 69.71% and climbing
    • Trades around 62.53 with a 50 day moving average of 57.04
    Fundamental Factors:
    • Beginning to be push by the Wall Street brokerages with their analyst releasing 6 strong buy, 5 buy and 9 hold recommendations
    • Sales are forcasted to grow by 11.40% this year and another 8.40% next year
    • Earnings are projected to increase by 16.40% this year, 13.80% next year and continue to grow annually by 13.66% a year for the next 5 years
    • Goldman Sachs made this a 5 year buy pick on 3/8
    General Investor Sentiment:
    • Readers on Motley Fool have discovered this stock and 521 readers have ventured an opinion
    • CAPS members vote 363 to 33 that the stock will beat the market
    • The more experienced All Stars agree 115 to 10 for the same result
    Summary:  The Bible says " The poor will always be with you" and I'm saying that there will always be value seeking shoppers and they will continue to shop at Dollar Tree (DLTR).  With an aggressive expansion program, continued stock buy backs and a same store sales increase between 4-8% this stock could give investors around a 16% annual total return over the next 5 years.


    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Themes: long ideas, retail Stocks: DLTR
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