They have found their niche, but as they grow larger there will be bigger challenges.  He still likes their growth prospect, but he is cautious as the market is nearing the late stages of the bull market.  He would continue to hold it.  

(A Top Pick Mar 9/17, Up 73%)  Their runway of growth is longer than DOL-T.  It is a dollar store for tweens and teens.  They just had their best Christmas quarter since 2012.  It is lumpy here so he would recommend holding it, rather than buying it.

The lower the volume, the less traders and the less players you have. Technical analysis is about crowd behaviour. When you have a smaller crowd, it is going to be a lower level of predictability. Chart shows this has been a wickedly volatile stock. It was moving in a sideways channel, had some rhythm, but now seems to have broken out. Given that it is a low volume stock, technically the breakout may not be as significant. You need lots and lots of players. So far, this looks good and if you had volume, that would add to this.

A $5 and below retailer for teenagers. They only have 531 stores in the US. To put this in context, Dollarama (DOL-T) has over 1000 stores, and expects to meet saturation at around 1400 stores. Five Below thinks they can easily get to 2000 stores. They are only in 31 states and are just opening their 1^st store in California this spring. They are growing their store base 20% per year, year after year. (Analysts’ price target is $50.)

An interesting retail concept in the US, sort of focused in between more apparel than dollar stores, but more on apparel and consumables. At one point this was your highflying, high growth type business. What attracted him was that as the multiple de-rated, some of the drivers that were leading to the slowdown were not permanent structural issues at the time. They are caught between where people want to shop today and where they wanted to shop 5 years ago. Not cheap enough for him to want to take a position.