DG

Dollar General Corporation

Consumer


Presented:08/07/2017
Price:$76.41
Cap:$21.03B
Current Price:$80.57
Cap:$17.72B

Presented

Date08/07/2017
Price$76.41
Market Cap$21.03B
Ent Value$23.09B
P/E Ratio17.25x
Book Value$20.16
Div Yield1.36%
Shares O/S275.22M
Ave Daily Vol3,057,950
Short IntN/A

Current

Price$80.57
Market Cap$17.72B
Dollar General Corp. is a discount retailer in the United States. The company offers a selection of merchandise, including consumables, seasonal, home products and apparel. It offers a focused assortment of everyday necessities, which drive frequent customer visits, and key items in a broad range of general merchandise categories. The company's consumables include paper and cleaning products, such as paper towels, bath tissue, paper dinnerware, trash and storage bags, laundry and other home cleaning supplies; packaged food, such as cereals, canned soups and vegetables, condiments, spices, sugar and flour; perishables, such as milk, eggs, bread, frozen meals, beer and wine; snacks, such as candy, cookies, crackers, salty snacks and carbonated beverages; health and beauty, including over-the-counter medicines and personal care products, such as soap, body wash, shampoo, dental hygiene and foot care products; and pet, including pet supplies and pet food. Dollar General was founded by J. L. Turner and Hurley Calister Turner Sr. in 1939 and is headquartered in Goodlettsville, TN.

Publicly traded companies mentioned herein: Dollar General Corporation (DG), Wal-Mart Stores Inc (WMT)

Highlights

The presenter is short shares of Dollar General (DG), forecasting a 15% - 20% earnings miss next year as margins compress due to deflationary pressures and mix-shifting into lower margin products, coupled with slowing comps. The presenter states that DG has historically had a smart management team who ran the company well, but thinks DG is simply “running out of levers to pull” in the face of mounting competitive pressures and slowing top-line growth. The presenter models $4.15 in 2018 earnings versus Street estimates of $5.00, and thinks the P/E multiple would likely compress towards 14x or lower as negative trends become apparent.

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Idea Discussion

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