nickdutson

How Did Major Retailers Do in August?

<p>This year will be remembered as a wipeout for the lion’s share of the equity market. Those individual shares slated to finish the year in positive territory are few, and those that thrived are even scarcer.</p>
<p> But one that did was <strong>Family Dollar Stores</strong> Inc., which heads into the last trading session of 2008 as the best performer among the Standard &amp; Poor’s 500-stock index, with a year-to-date gain of nearly 30%.</p>
<p>In a year of struggles for the American consumer, for business spending, technology, and international growth, that FDO is the winner in the S&amp;P 500 may not be surprising. The company operates more than 6,000 retail discount stores in 44 different states, specializing in consumer staples, including food and cleaning products, although it does sell economically sensitive items. RealtyNet Advisors, Inc offers Family Dollar properties for sale as <strong>Tenant In Common Replacement Properties</strong&... </p>
<p>“They do sell some apparel items and some consumer items but they’ve been tilting their strategy toward food, which we like,” says Patrick Dunkerly, lead portfolio manager of the UMB Scout Mid-Cap Fund, which owns the stock. “Part of our thesis on Family Dollar was that the lower gas prices should help them.” </p>
<p>With consumer confidence tumbling to an all-time low in December, it’s clear that Americans remain stressed about their outlook for the future, so the easing of gasoline prices would be more likely to fuel purchases of staples. As people try to save money, Family Dollar becomes a more attractive shopping option, and Wedbush Morgan analysts say the company has responded, improving “the assortment and quality of merchandise categories and store appearance in order to attract low to middle-income consumers struggling with their budgets.” </p>
<p>However, analysts are beginning to believe the stock may be hitting a ceiling, for now. Buckingham Research analysts note that investors may be reluctant to buy shares with the forward price-to-earnings ratio sitting near 15 “when earnings are expected to decline for two years in a row.” Still, the company and its rival, Wal-Mart Stores, are among the few that have continued to post year-over-year increases in same-store sales growth. Wal-Mart shares are also up on the year, having gained more than 15%. </p>
<p>“It’ a little bit late to get really excited about it,” says Mr. Dunkerly, who has been reducing the firm’s position in the stock. “Overall, it’s a fine company, but I think the push-back from the Street is that it’s not that cheap anymore.” Do your homework like RealtyNet Advisors did, and invest in a company that will not just survive but grow through these hard economic times.<br />
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And The Winner Is: Family Dollar

This year will be remembered as a wipeout for the lion’s share of the equity market. Those individual shares slated to finish the year in positive territory are few, and those that thrived are even scarcer.

But one that did was Family Dollar Stores Inc., which heads into the last trading session of 2008 as the best performer among the Standard & Poor’s 500-stock index, with a year-to-date gain of nearly 30%.

In a year of struggles for the American consumer, for business spending, technology, and international growth, that FDO is the winner in the S&P 500 may not be surprising. The company operates more than 6,000 retail discount stores in 44 different states, specializing in consumer staples, including food and cleaning products, although it does sell economically sensitive items. RealtyNet Advisors, Inc offers Family Dollar properties for sale as Tenant In Common Replacement Properties.

“They do sell some apparel items and some consumer items but they’ve been tilting their strategy toward food, which we like,” says Patrick Dunkerly, lead portfolio manager of the UMB Scout Mid-Cap Fund, which owns the stock. “Part of our thesis on Family Dollar was that the lower gas prices should help them.”

With consumer confidence tumbling to an all-time low in December, it’s clear that Americans remain stressed about their outlook for the future, so the easing of gasoline prices would be more likely to fuel purchases of staples. As people try to save money, Family Dollar becomes a more attractive shopping option, and Wedbush Morgan analysts say the company has responded, improving “the assortment and quality of merchandise categories and store appearance in order to attract low to middle-income consumers struggling with their budgets.”

However, analysts are beginning to believe the stock may be hitting a ceiling, for now. Buckingham Research analysts note that investors may be reluctant to buy shares with the forward price-to-earnings ratio sitting near 15 “when earnings are expected to decline for two years in a row.” Still, the company and its rival, Wal-Mart Stores, are among the few that have continued to post year-over-year increases in same-store sales growth. Wal-Mart shares are also up on the year, having gained more than 15%.

“It’ a little bit late to get really excited about it,” says Mr. Dunkerly, who has been reducing the firm’s position in the stock. “Overall, it’s a fine company, but I think the push-back from the Street is that it’s not that cheap anymore.” Do your homework like RealtyNet Advisors did, and invest in a company that will not just survive but grow through these hard economic times.