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Dollar General Corporation Message Board

  • mdarwin3131 mdarwin3131 Dec 5, 2012 10:29 AM Flag

    Why the drop?

    Can someone explain the drop over the last 3 days? I see the volume is low which is reassuring but having a hard time finding news to justify drop unless it is because of the recent insider sells or just repositioning with the move to S&P. Could be nice short squeeze coming if earnings and outlook are good however. Would appreciate any insight.

    Sentiment: Strong Buy

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    • I don't know if my previous post went through, will you let me know if it did? I don't see it showing up.

      Sentiment: Buy

      • 1 Reply to gwhit07
      • I'm fully aware that alot of people do not like Cramer on these messages boards, it's just a matter of your personal opinion. With that said, this is what he sent his subscribers today:

        Dollar General (DG:NYSE) shares underperformed the broader averages Tuesday and, contrary to what we'd initially expected, they did not rally off the stock's Friday entrance into the S&P 500. While there have been a lot of general retail concerns, given the disruptions from Hurricane Sandy and the fragile consumer, the underperformance has had little to do with fundamentals. After all, only 3% of Dollar General stores are located in areas affected by the storm, and 70% of its products are consumables, making it more defensive in a volatile retail climate.
        Instead, the overhang on the shares more to do with the overhang of Dollar General's private-equity group, Buck Holding, which continues to sell down its stake and will continue to do so over the next few quarters. The S&P 500 inclusion triggered an increase in liquidity increased last week, and Buck Holding sold 12.169 million shares while index buyers were picking up the 26 million. The firm's stake is now 17% of the share float, or 55 million shares, and we expect it will be out over the next few quarters. Similar to the government overhang on AIG (AIG:NYSE), another Action Alerts PLUS position, we view this eventual exit as a positive -- and we believe that, on weakness, both stocks are attractive on a fundamental basis.

        We expect a solid quarter from Dollar General next Tuesday, with same-store comparisons expected up 4% to 4.5%; gross- margin expansion of 25 basis points; and leverage in selling, general and administrative expenses. Guidance will be important, and we believe the company will foresee comps of 4% and 5%, as well as a likely tightening of the lower- end earnings range to bracket the analyst consensus. (Earnings guidance is currently at $2.77 to $2.85 per share, compared with the Street at $2.85.) But, of course, commentary will also be important.

        That aside, Dollar General continues to expand its product assortment and retail innovation, and it will grow square footage growth by 7% to 10% annually. With the stock trading at 14x forward estimates, and with earnings growth at 17% to 20% -- well north of that what that rate would suggest -- we remain positive on the stock.

        Sentiment: Buy

    • I'm fully aware that alot of people do not like Cramer on these messages boards, it's just a matter of your personal opinion. With that said, this is what he sent his subscribers today:

      Dollar General (DG:NYSE) shares underperformed the broader averages Tuesday and, contrary to what we'd initially expected, they did not rally off the stock's Friday entrance into the S&P 500. While there have been a lot of general retail concerns, given the disruptions from Hurricane Sandy and the fragile consumer, the underperformance has had little to do with fundamentals. After all, only 3% of Dollar General stores are located in areas affected by the storm, and 70% of its products are consumables, making it more defensive in a volatile retail climate.
      Instead, the overhang on the shares more to do with the overhang of Dollar General's private-equity group, Buck Holding, which continues to sell down its stake and will continue to do so over the next few quarters. The S&P 500 inclusion triggered an increase in liquidity increased last week, and Buck Holding sold 12.169 million shares while index buyers were picking up the 26 million. The firm's stake is now 17% of the share float, or 55 million shares, and we expect it will be out over the next few quarters. Similar to the government overhang on AIG (AIG:NYSE), another Action Alerts PLUS position, we view this eventual exit as a positive -- and we believe that, on weakness, both stocks are attractive on a fundamental basis.

      We expect a solid quarter from Dollar General next Tuesday, with same-store comparisons expected up 4% to 4.5%; gross- margin expansion of 25 basis points; and leverage in selling, general and administrative expenses. Guidance will be important, and we believe the company will foresee comps of 4% and 5%, as well as a likely tightening of the lower- end earnings range to bracket the analyst consensus. (Earnings guidance is currently at $2.77 to $2.85 per share, compared with the Street at $2.85.) But, of course, commentary will also be important.

      That aside, Dollar General continues to expand its product assortment and retail innovation, and it will grow square footage growth by 7% to 10% annually. With the stock trading at 14x forward estimates, and with earnings growth at 17% to 20% -- well north of that what that rate would suggest -- we remain positive on the stock.

      Take what you want from his opinions, hope this helps. I added to my position today and am long, good luck going into earnings.

    • Somebody wants to buy low. That is why. This is gonna go up

 
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