Actually it's pretty long and it would take quite a few messages. I'm not a CS client, but I get access to their reports thru E*Trade and Schwab. Probably other discount brokers give access as well. Here's the summary of the report; if there is any specific part of the report that you're interested in (margin compression, relative values, DG's strategy) let me know and I'll see if I can post it.
CS View. Based on current valuation, changing near term competitive dynamics, and potential margin pressure, we believe it is time to take a break regarding our Outperform rating on Family Dollar (lowering rating to Neutral). Gross margins will likely be capped in the near term and Dollar General’s decision to do what is right for its customer and its longer term competitive position by going after market share could change the short term competitive dynamics of the dollar store segment. Typically trading at a discount since our upgrade, FDO is now trading at the high end of the valuation range both historically and relative to peers. Nevertheless, we maintain interest in the segment given strong traffic trends, high square footage growth, less potential impact from growth in e-commerce, and strong ROIC characteristics. We may shift our focus to DG as it makes progress on paying down debt, generating further accretion to shareholders. Its valuation is now the lowest of the three major dollar stores.
Just a note b4 heading to the links this fine day, my gut says if margins are pressured they'll be short term(thinking oil is going to drop big soon) and also as more of a question not knowing much about DG, doesn't FDO have more private labeling than DG to help margins? Just a thought.
Zack just got home. Surprised to say the least. Delayed reaction from DG yesterday? Isn't today usually based on past they would announce some prelim #'s? So does someone has some knowledge? I don't know. Thoughts?