DLTR

Dollar Tree Inc.

Consumer, Event Driven/Special Sit


Presented:09/11/2014
Price:$55.68
Cap:$11.40B
Current Price:$67.73
Cap:$14.56B

Presented

Date09/11/2014
Price$55.68
Market Cap$11.40B
Ent Value$11.74B
P/E Ratio27.25x
Book Value$8.68
Div YieldN/A
Shares O/S205.63M
Ave Daily Vol3,000,000
Short Int1.24%

Current

Price$67.73
Market Cap$14.56B
Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise at the fixed price of $1.00. The company’s stores provide consumable merchandise, which includes candy and food, and health and beauty care products; and everyday consumables, such as paper and chemicals, and frozen and refrigerated food. Its stores also offer various merchandise that include toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods consisting of Valentine's Day, Easter, Halloween, and Christmas merchandise. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Tree Canada, Dollar Giant, and Dollar Bills. It operates approximately 5,080 stores. The company was founded in 1986 and is based in Chesapeake, Virginia.

Publicly traded companies mentioned herein: B&M European Value Retail SA (BME LN) Dollar General Corp (DG), Dollar Tree Inc (DLTR), Family Dollar Stores Inc (FDO), KKR & Co LP (KKR) Wal-Mart Stores Inc (WMT)

Highlights

The presenter is long shares of Dollar Tree (DLTR) and sees upside regardless of the outcome of the Family Dollar takeover. Though the presenter thinks DLTR is unlikely to win (20% chance at best at this point), he does not rule out the possibility and sees shares worth as much as $110 over 18 months if there is a surprise outcome; otherwise, he still sees at least an $85 – $95 target, driven by Dollar General/Family Dollar store divestitures and continued execution by an excellent management team.

The presenter highlighted core differences in DLTR’s business concept compared to Dollar General and Family Dollar. Despite DLTR’s set price of $1 on all products, its customer base is more affluent than other discount retailers’.

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Idea Discussion

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