| don_chambers Thu Feb 23, 2006 2:50 pm |
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DG
Any opinions on Dollar General?
The P/E is down to 14.3 while the 10 year average if 25.
They seem to be opening several stores around. Of course, they have to compete against WalMart but their net profit margin is a little higher. They have a current ration of 1.9 when the industry’s is 1.1 and WalMart is below 1. Their 10 year growth is a little better than WalMart and they have more room to grow. |
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| blast_investor Thu Feb 23, 2006 7:01 pm |
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Does Wal-Mart compete in the market where DG dominates?
I highly doubt any other retail company would be able to compete successfully against Wal-Mart.
The valuation is cheap under historical valuation basis, the past growth was impressive. But again, in this retail market, Wal-Mart threat is real, and past growth is no guarantee of future success.
Assessing business behind this stock is tough because of Wal-Mart threat. The key for successful long term investment in this kind of stock is competitive advantage assessment on top of reasonable valuation. |
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