Dollar General Corporation (NYSE:DG) is a customer-driven
distributor of consumable basics, serving low, middle and fixed
income families. The company's more than 5,000 stores throughout
the Middle and Southeastern United States offer quality
merchandise at everyday low prices.
The company believes continued profitable growth for its
shareholders will accompany its commitment to better serve
customers. The company is reaching more customers than ever
before, with a powerful mix of high-turn merchandise. As the
company expands, it is supporting growth through investments in
distribution, technology and people. Their strategy is to
leverage its investments to control overhead while increasing
profits. Dollar General has consistently achieved increasing
sales, earnings and operating efficiency while significantly
lowering operating expenses.
(source: Dollar General)
Reasons To Invest
There's no denying that Dollar General has had its share of
problems recently. In fact, in late April, the company announced
that it would be forced to restate its financial condition for
the fiscal year between 1998 and 1999. According to the
company's preliminary investigation, it reported that it would
reduce its earnings by 7 cents during that period. The accounting
irregularities uncovered by Dollar General's management are
obviously a major cause for concern and resulted in a slew of
class action lawsuits.
Despite the controversy surrounding the company, there are
several bullish reasons to take a closer look at shares of
Dollar General at current levels for investment purposes. For
starters, several key insiders have acquired shares of the
stock following the company's announcement of its problems.
During the month of May, three officials acquired stock in
their company which displayed their respective long-term optimism.
It generally pays to invest with the directors of a company,
and Dollar General's executives' purchases suggest that much.
Furthermore, the nature of Dollar General's business and the
merchandise that it sells is very conducive to the current
economic environment. As consumers cut back on spending, they
seek out cheap prices for goods. And Dollar General's low-priced
merchandise fits into virtually every budget.
Along the same thought process, Dollar General's sales should
be positively impacted by the refund checks issued by the U.S.
Treasury this summer. Consumers are likely to make those checks
last and will do so by shopping at Dollar General's stores.
Finally, perhaps the most positive influence on this stock over
the intermediate- and long-term is that the Federal Reserve
has drastically reduced interest rates in 2001. That variable
alone may be enough to consider shares of Dollar General at
Shares to Qualify = 1 Accept Foreign Accounts: Yes
Auto-reinvestment = Yes Temper Enrollment Serv: Yes
Min/Max Investment = $0 to $75,000/month
Dividend: 0 Cash: $1+4c/sh Auto ReInvest: 75c+4c/sh
Registrar & Transfer Co.
Industry Group: Retail 52-week high=$24.05
Annual Dividend Per Share=$0.50 52-week low =$13.44
Last earnings 12/00 est=0.22 actual=0.21
Next earnings 04-17 est=0.14 versus=0.14
P/E = 31
Strong Buy = 1
Moderate Buy = 8
Hold = 3
Moderate Sell = 0
Strong Sell = 1