Dollar Tree

DLTR-Q

Loves this dollar-store space. It's defensive. When the economy declines, people will buy here. The stock has sold off after execution issues about an acquisition.

Much cheaper than other dollar stores trading at 16 times earnings. No dividend. They bought Family Dollar and that didn’t go that well and affected the stock price. They continue to do well. Good growth profile. (Analysts’ price target is $102.31)

It's like Dollarama. It's doing very well with same-store sales up 4% in their last report. However, they bought Family Dollar and undestimated their issues: lower margins, weakly trained staff, poorer inventory systems. So, this margin has some problems, which has pressured the stock. But this present a buying opportunity. (Analysts' price target: $102.71)

Much cheaper than Dollarama (DOL-T) trading at 16 times earnings. They bought Family Dollar and that didn’t go that well and affected the stock price. There is a little stabilization now. (Analysts’ price target is $111.54)

Dollarama trades at a much higher multiple, nearly twice as much. DLTR's stock fell because of Family Dollar acquisition, but they should get their margins back up again. Free cash yield of 5.6%, much cheaper than Dollara.

(A Top Pick Oct 4/16. Up 9%.) This has been an up-and-down stock. They merged with a company called Dollar General and the stock ran up to about $90 a share last year. The 1^st results came out. Mergers cost money and things weren’t happening, and the stock depressed. The last quarter came out and the merger is starting to work now. This company can open several thousand more stores, so he still likes this.

(A Top Pick Oct 4/16. Down 4.73%.) This got caught in the Amazon (AMZN-Q) fiasco. They created their own problems with a takeover of Family Dollar. Still thinks this is going to work in the longer-term.