Top Stock Picks for Week of August 30, 2021
Dollar General Corporation DG is one of the largest discount retailers in the United States. The company trades in low priced merchandise typically $10 or less.Shares of Dollar General have increased in the past three months. Better pricing, private label offerings, effective inventory management and merchandise initiatives bode well. The company posted better-than-expected first-quarter fiscal 2021 results, despite a challenging backdrop. We note that the government stimulus payment favorably impacted the performance. While the top line fell marginally, the bottom-line grew year over year. Markedly, the company registered net sales growth in non-consumable categories and witnessed gross margin expansion. Following a stellar start, the company raised fiscal 2021 view. Dollar General’s commitment toward better pricing, cost containment, private label offering, effective inventory management, merchandise, and supply chain efficiencies should drive sales and margin trends in the long run. Dollar General has been actively managing cash flows, returning much of free cash to investors through share repurchases and dividends.
Best Buy Company Inc. BBY is a multinational specialty retailer of consumer electronics, home office products, entertainment software and more. Best Buy’s shares have increased in the past three months. Its focus on developing omni-channel capabilities, supply chain and cost-containment efforts bode well. The company delivered stellar second-quarter fiscal 2022 results with both the top and the bottom line increasing year over year and surpassing the Zacks Consensus Estimate. The quarter gained from sales growth at the Domestic and International units. Demand for technology products and services was strong. Solid consumer spending ability backed by government stimulus and high savings levels is bolstering demand. It raised comparable sales view for fiscal 2022 on solid customer demand and momentum in the business. Under the next phase of its “Building the New Blue” program called “Building the New Blue: Chapter Two”, Best Buy’s top most priority has been to pursue growth opportunities, better execution in key areas, cost containment, and investing in people and systems.
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