Dollar General/ DG GREAT BUY
Surprisingly enough this company is stellar when you look at the financials. Its Cash Cycle is under 30 days with absolutely NO ACCOUNTS RECIEVABLE!!! its been growing its revenue around 10% each year, management has been buying back shares to increase shareholder equity, its dividends are squat :( , but they are gunning for Five and Below/ FIVE s market by opening POP Shelfs in the 'Burbs. If the POP Shelfs are able to take hold then I could see this company keeping par with its 10% revenue growth rate for the next 10 years. For the past decade the GPM has not dipped below 30%. the Return on Equity (for the value investors like myself) has been steadily growing with the last years being 25.5% with a 10 year average of 20%. And with COVID-19 still keeping people out of work and unemployment moderate to high I can see more households stretching the dollar which will grow this company's Revenue. As the families effected will be looking for the bargain stores to save their capital. The Company has ZERO short term debt, but they have no treasury shares. :( so, they have no equity out of the market and i think this particular reason is why i think its more of a "B+" investment rather than a A+ investment. If you're a conservative investor the D/E Ratio for the past year was .43, so that's not bad! with only 4% of their operating income going toward paying off interest on long term debt as compared to the moderate 15%. :) so when they buy their shares back its possible they might be retiring them. the Current Ratio has been a strong 1.5-1.7 for the past decade with a few exceptions, and their retained earnings pool has been steadily growing. Currently its trading under value with a fair market value of 196.xx with Ben Grahams formula putting it around 294.xx. I would love to see the price drop below 185.xx before buying so that way one can maximize their return on investment. If you're a growth investor or value investor this is a great company a solid B+ or A- to build a portfolio on. I would love to see this ABCD pattern complete as a great entry.
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