Dollar General Corp. (DG)

He expects a good quarter on Thursday, with consumers stretching their dollars.

His work colleague likes it fundamentally. Looks as though it's built a base, and at some point it will move. Making slightly higher highs and lows. Lots of room before it hits its first level of resistance of $200+ on the chart.

His firm name is "ValueTrend" for a reason. A lot of tech and growth stocks are way overdone. Everyone's piling in due to FOMO, and that's what's driving the market. He doesn't want to be the last guy in the elevator before the cable snaps. Looks as though it's starting to break out, worst is over. 

Remember, he legs in by 2% at a time up to a full position of 6%. Old neckline is around $200. Not bad upside. If it breaks down below the last low, you sell. Good opportunity for a value play. Yield is 1.69%.

Down 47% in 2023 and an S&P dog. Shoplifting and trouble finding workers didn't help. Also, the economy didn't crumble as expected. The new CEO could turn things around. 

Company has been a "turn around story" the past year. Recent market selloff creating buying opportunity. Stores located across America which creates large footprint for retail sales. 

The question was on his preference between Dollar General and Dollar Tree in the U.S. Dollar General has cratered so it looks like a buying opportunity but actually isn't since it benefited from the pandemic and may just be returning to normal levels. This also causes him to be cautious on Dollar Tree. 

USA dollar store market very competitive. In the Canadian market, DOL essentially has no competitors so he prefers DOL. Ability to compete is hard to predict. Better options for investors in sector. 

The dollar stores have reported disappointing numbers recently, triggering a long sell-off.

Last week, they reported a bad miss and got punished. Maybe they're facing too much competition from Costco's deals.

Its earnings release on June 1, 2023, missing both earnings and sales estimates sent shares significantly lower. The broader markets began moving higher in May as investors felt more confident in the economy and the markets, and consumer staples stocks, which were a safe haven for investors in an uncertain period from 2022, moved lower in May. The move was mostly sentiment and risk-related, until its earnings release in June which sent shares even lower.

We feel its valuation is now more in line with its historical range, and if earnings can meet or beat estimates, we would expect shares to gradually climb back.
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If rates remain high, these retailers will be challenged.  In a recession, he prefers healthcare and utilities (long, fixed contracts).

It is the worst performing consuming name he owns among seven. Has had challenges, fundamentally and technically. Hope things work out.

DG has executed very well but they've been dealing with cost inflation, consumers buying lower-margin consumables vs. discretionary and "shrink" (theft). Owns Dollar Tree, which suffers similar problems, but DT has been introducing more price points as the new CEO restructure, so she sees more potential here.

Recently hit a 52 week low.
Fundamentals better in Canada than USA.
Revenues recently disjointed analysts.
Inflation hitting company hard with rising costs.
Dollarama better investment.
Pass at this time.

They hosted a terrible conference call. DG has lost its way. He wants to ring the neck of management.