It is incredibly important to remember that when analysts talk about risk they are referring to quarterly performance bonus risk and when they say long-term they mean the quarter after this quarter.
Thank you again for your book which I received a couple years ago through a giveaway. I was surprised to receive it given how remote I live. My son is now interested in and is investing. The book will be on his study list along with many of your referenced books on my bookshelf. Thank you for all you do. Cheers from Canada!
Sven, thanks, now considering this a buy for myself. Just a small remark, the drop in Net Income seems to have been more impacted by the increase in operating costs (Selling, etc) than by the drop of cost margin. As revenue continues to increase and management could potentially trim down a part of their operating costs, I wouldn't be surprised if net income is back to the $2B level in a year or so and growing from there.
Thank you Sven. I got 300 shares of DG when it dipped to around $80. I think next earnings will be better because of the coming holiday season shopping
Great analysis Sven! I started buying DG sub $80 per share and will continue DCA at lower prices. Also, would you mind doing an update on both WBA and WBD and where it would fit into your risk/reward graph?
I follow DG closely all I see is lack of investor sentiment. Right now every investor is focusing on technology. I don't own any share but there's potential here for long term holders.
Hi Sven, What about DGs debt of 24billion usd, considering they only have 6,7 billion in equity, and they only make 1,6 billion in profit a year. Seems like with an interest rate of 4% they are paying a billion in interest a year. What are you thoughts about this, am I overseeing something perhaps?
Time to repay net debt is around 10 years with recent FCF numbers. On an EV basis it takes your 20 years to get your money back. I would never buy the whole company but at 10% FCF yield a 2x in the next 5 years is certainly possible. Especially when rates come down.
@@Value-Investing Ok but Buffett told me I should act as if I buy the whole company 🤔. Maybe I should instead just pick up some shares, hope for a double and let the next one with the debt.
Funny you make a video like this right after I opened a position in DG a few weeks ago at 80$! I was trying to decide between DG and DLTR and in the end i bought a little bit of both. DG has a little too much debt so it had to stop the buyback exactly at the wrong moment, i would prefer if they stop the dividend instead, and it seems they have also some personnel related problems that they're trying to solve. DLTR seems to be in a similar situation, with less debt and a problem with their Family Dollar branch. Pretty good ROIC with both of them but I think people are underestimating their earnings potential, if you take away their "Growth Spending" they will be a lot more profitable and the room for espansion in the US is pretty low, they will be everywhere in the US in a couple more years, all that growth capex will go away and they should improve their margins... On the contrary i'm still a little bit on the sideline with ULTA, they sell expensive items and in the last recession in the GFC they didn't do as well... I will wait probably a SUB 300 price for more margin of safety! Thank you for your work as always Sven! 💪
I find it helps to look at the sector charts from Trump’s first term surprise win in 2016. The patterns in movement seem to be the same: namely, Chinese stocks down significantly, any stock that relies on Chinese trade prices being low, but very little concern about Chinese exposures on the demand side - so Apple prices continue to climb even as the Chinese consumer weakens dramatically. The reality is that Chinese stocks actually climbed dramatically under Trump 1.0 after three or four months. So, I’m trying to capitalize on the Trump tariff fears right now.
Hi Sven. The current CEO, Todd Vasos, has already been CEO from 2015 to 2022. During those years the company improved a lot in terms of sales, earnings and market share price. Now Vasos has returned as CEO. Do you think this could probably mean that he will make the company recover and continue the trend that he started and that seems to have stopped since his departure in 2022?
DG may still have a chance against WMT and am considering buying it a bit more. But, Sven, you can't believe what a CEO says on an earnings call (5:13), can you?...
When the new Fair Labor Standard Act (FLSA) act salary requirements go into effect, DG will be required to pay exempt employees $58k vs the current minimum of $43k salary per year. I.E. Store managers who they consistently require to work 8-30 hours of unpaid overtime per week. $15,000 X 19,400 stores = Dollar General loses another 20% in gross profit per quarter.
Can someone explain to us non USA citizens, how the business model works? How can a small chain be competitive without the economies of scale against Walmart, Costco etc? Do they have some competitive advantage?
This is a quality and intresting question! You can study this, with this main question in head. Look up their vision, mission and is it in line with their enterprise strategy, find out strength/ weakness/ oppertunities/ Threats compared to their competitors. Product brands and productlifetime... There is much more to figure out for sure. All in all its a good approach to find out if its a worthy investment for long term compared to its competitors. But the market is fast and the approach that Sven Does is quick and sticks to its scope. Because the way I set it out now does not "really" fit for investing, because its more like business entrepreneurship, which helps the business but does not particually have to help and increase the price of its stock. In my opinion you are right, Dollar General doesn't really produce anything and they just sell. So as an investor you are better of to buy its bigger competitor. Also I really like that you asked a very important question for a qualitive study in this comment section, which isn't seen a lot here.
Sven, I agree on the value of DG but am waiting for reports as I anticipate lower quarterly earning this year with the stock price taking a hit and lower cost basis. I have held and sold DG in the past and will continue as long as management continues making good decisions.
Dollar General and Dollar Tree should consolidate. There are way too many of their stores close to one another. I would rather see one larger store offering more goods than seeing two smaller stores competing against each other from across the street or down the same road. That would make for better competition against Walmart, Target, etc.
I actually added to my $DG position to a total of 100 shares yesterday. Sold a June 20, 2025 $105 covered call for a premium of $415. Easy money really.
Ciao Sven! What about The Italian Sea Group? It might have some issues with tariffs, with Trump's amministration. It has a low p/e like Sanlorenzo. Now has 7.5 nearly p/e
If you look at the breakdown for discretionary vs consumables between Dollar General and Dollar Tree, Dollar General has a 53:47 and dollar general has a 19:81 split (Source CNBC Why dollar stores are sruggling). Tarrifs would hurt discretionary items more than consumables since consumables are food products generally produced in the USA or imported from nearby countries while discretionary are mainly Made-in-china products, so in my mind, tarriffs, if they do pass which I don't think the 10% overall would pass, would hurt dolalr tree more than dollar general so while dollar general might have lower revenues or earnings depending on whether they push costs onto consumers, DG could gain some market share over DT.
Dollar tree cut their guidance, profit is down…I bought Dollarama (Canada) not because their stock price is high, but because the growth is stable, the dividend is going up reasonably with profits, they are expanding into Mexico. Their stores are in better shape than their US counter parts. Their stores are often in the same mall as Walmart, who you would think is their largest competitor...
Its a completely different business. You cannot compare DG to DLTR - they make vast difference in their margins. DLTR deserves like a 4-5x multiples from DG for anything.
Its a completely different business. You cannot compare DG to DLTR - they make vast difference in their margins. DLTR deserves like a 4-5x multiples from DG for anything.
@@Value-Investing Warren never bought apple he had other people on his team make the decision for him since he was still using a flip phone until just a few years ago and does not understand the tech business but he just sold half of apple position yet it keeps going up so he is wrong again.
@@divyeshpatel5652 His excuse was about valuation but if he bought it for 50% less it would still have been a bad investment. Just because everyone needs to eat and they have big brand name products on all the middle level shelves still does not mean it could be a good investment for the future.
@@RonaldRendite it's not just chinese made goods that will get tariffs, things made in India, Thailand, mexico. how much of their inventory won't get hit with import tax?
Sven get clued in not Dollar Store you want to buy Dollarama stock on the TSX in Canada. The Yuan will devalue at least 50 percent against the U.S. dollar and at least 45 percent against the Canadian dollar. If Canada isn't forced to slap 60 percent tariffs on goods coming into Canada from China profits at Dollarama will rise will the falling Yuan. The 60 percent tariffs on Chinese goods coming into America will lower profits at Dollar General but the falling Yuan will counteract some of those lower profits.
Price doesn’t = value. The dollar stores in general are poorly ran & have saturated the market in the USA. They have 0 online capacity & lots of debt. Overtime good companies get cheap due to the market at no fault of their own. Mr Market does its thing. Daily videos ….. Need material ,I get it.
Not an issue for them with those cash flows. Look at the maturities, only 750M this year then nothing for several years and they have accumulated cash to pay off the maturity this year. It is why buybacks are on hold.
@danaphanous isn't cash 10% of their debt. so not much? also the signs of recession everywhere with so many places cutting jobs everyday and trump tarriffs coming. very unpredictable future.
@@Pizza-gb1ch Yep, that's why the buybacks are on hold. Was the stupidest thing ever to take on so much debt for expansion AND buy back at highs in 2022. Keep in mind that money also went towards growing the store fleet and expanding square footage a lot, investments, etc, but the mass of buybacks was a mistake. It is easily serviceable, and locked in at pretty low long term rates as I mentioned, but it was still very dumb to lever up the balance sheet more than needed for buybacks at high evals right as interest rates were starting to rise. My guess is management wanted a bunch of money cheap while the market still loved them, but then got a bit trigger happy when the cash pile was large. Anyway, they are not in danger with those cash flows, but a clear mistake from the past that has contributed to the buybacks being on hold and the stock decline.
Did you watch CNBC (not the television youtube-channel, just CNBC) had a short document about dollar stores? There was interesting points about structural problems of the business model.
My household income is in the top10% of income earning households in the US and I’m at dollar tree a lot (mainly because there are more locations around me) so while I may be the exception and not the rule I also see what they have there and I think they’ve got great affordable stuff if people just go in there. I love how much smaller it is than say a Walmart and without having to walk around a huge warehouse building. Not pharmacy, fresh produce section, electronics and outdoor or home goods section. It has a lot of what people need for quick things at affordable pricing no matter your income level
The new tariffs will really affect this business. Any slight rise in prices has an outsized impact on their struggling customer base. That said, revenues will go down but people still have to eat
DG has huge problems not everything is in the balance sheet, they are in debt, salaries are shit and most "cheap products" are cheaper in wallmart and target. Americans slowly have less and less incentive to buy from them and they are no longer cheap they raised the prices also with Trump their business will suffer due to china sanctions (they import a lot of Chinese cheap inventory)
Tariffs are inflationary, so it's also possible that more people will be turning to discount retailers like DG to save money, especially if there is a recession.
@@thatpointinlife as a percantage of imported goods vs american made, it is mucher higher % of imported in DG, so their costs will rise more, and profitability will be effected in a more dramatic way. While more people might shop there to save, their original customers will have less to spend, so potentially a wash. DG does well in small towns without other options, in more suburban areas, there are many other stores with cheaper prices than DG.
In 2020 I looked up the major shareholder in ACTION shop, the European Dollar general I guess, it's 3i group. It 4x since then. It still looks cheap, but price anchoring has kept me from buying more.
I think it depends on your selection pool of stocks, if you compare it with energy, basic material producers, DG is not so interesting. Economic downturn hits hard on retail business, many chinese retail business went bankrupted this year, stores are hard hits.
It is incredibly important to remember that when analysts talk about risk they are referring to quarterly performance bonus risk and when they say long-term they mean the quarter after this quarter.
that is correct!
Thank you Sven! Great analysis as usual.
Glad you liked it!
You have not discuss the potential impact of tariff on DG. Any risk there?
Thank you Sven for fantastic analysis on. DG.
:-)
I think we saw the 52 week low today. This is a great buy imo at these levels. Value for sure. Cheers 🍻
Absolutely not, read the news about them numbers aren't everything they are in huge debt and wallamart is much cheaper.
@ two very different businesses catering to different customer base.
@@psychsounds news follows the stock price
Haha...
A MONTH LATER.......
This Didn't AGE WELL...
STOCK IN 60'S NOW..........
TIMMMMMMMMMMMMMBERRRRRRRRRRRRRRRRRRRRR
Thank you again for your book which I received a couple years ago through a giveaway. I was surprised to receive it given how remote I live.
My son is now interested in and is investing. The book will be on his study list along with many of your referenced books on my bookshelf.
Thank you for all you do.
Cheers from Canada!
that is nice to hear!!!!
Sven, thanks, now considering this a buy for myself. Just a small remark, the drop in Net Income seems to have been more impacted by the increase in operating costs (Selling, etc) than by the drop of cost margin. As revenue continues to increase and management could potentially trim down a part of their operating costs, I wouldn't be surprised if net income is back to the $2B level in a year or so and growing from there.
Update: more than 10% down from the point of the video. I think it moved a little bit in the quadrant. 😉 I will start buying now.
Thanks, I learn good idea Thanks for value buying ❤❤❤
How do you reconcile on the one hand expecting higher inflation in the future and at the same time investing in a retailer?
Thank you Sven. I got 300 shares of DG when it dipped to around $80. I think next earnings will be better because of the coming holiday season shopping
Short term cash flows are priced in:)
thanks for sharing!
Energy Fuels Inc
NYSEAM:UUUU 35% +
CUE BIOPHARMA
NASDAQCM:CUE 360% +
Already priced in
@@TheBigShort11what do you mean?
what do you think about Celanese Sven?
Dow is also looking interesting
Great analysis Sven!
I started buying DG sub $80 per share and will continue DCA at lower prices.
Also, would you mind doing an update on both WBA and WBD and where it would fit into your risk/reward graph?
Hard for me to see aside of what I already discussed. ruclips.net/video/AxWg3aJoOAo/видео.html
I could not believe it, but somebody told me that Sven once won a national boogie competition.
hahaha
I follow DG closely all I see is lack of investor sentiment. Right now every investor is focusing on technology. I don't own any share but there's potential here for long term holders.
Thank you Sven. Could you please analyze Costco?
what is going on there>!>!>!>!>!
Thanks. I appreciate your analysis on this Dr. Carlin. Tough to be a value investor in an overvalued market.
value investing is never liked, nor easy!
Hi Sven,
What about DGs debt of 24billion usd, considering they only have 6,7 billion in equity, and they only make 1,6 billion in profit a year. Seems like with an interest rate of 4% they are paying a billion in interest a year. What are you thoughts about this, am I overseeing something perhaps?
is it leasing or just debt?
They have 6B of actual debt
Thank you Sven. Great analysis as always. Could you please analyse Heineken and Carlsberg?
Yes, soon
What do you think what Berkshire sees in Dominos? Why them instead of Mcdonalds for example?
interesting question
any body things i will hit the 60's or less?
Hey Sven. Interesting analysis, but what do you think about Carrefour? It has almost an 6 % dividend yield.
The french goverment has an history in interference with publicly traded business in the market.
but nothing more apart from that!
Time to repay net debt is around 10 years with recent FCF numbers. On an EV basis it takes your 20 years to get your money back. I would never buy the whole company but at 10% FCF yield a 2x in the next 5 years is certainly possible. Especially when rates come down.
companies never plan to repay debt
@@Value-Investing Ok but Buffett told me I should act as if I buy the whole company 🤔. Maybe I should instead just pick up some shares, hope for a double and let the next one with the debt.
@@marcb934Okay, buy the whole company and repay the debt.
@@Value-Investing I had thought tsla repaid their debt/loan.
Maybe give Aflac a look? It has good P/E and good eps growth, buy steady declining gross revenue.
sorry, I don't do insurance :-(
Funny you make a video like this right after I opened a position in DG a few weeks ago at 80$! I was trying to decide between DG and DLTR and in the end i bought a little bit of both. DG has a little too much debt so it had to stop the buyback exactly at the wrong moment, i would prefer if they stop the dividend instead, and it seems they have also some personnel related problems that they're trying to solve. DLTR seems to be in a similar situation, with less debt and a problem with their Family Dollar branch. Pretty good ROIC with both of them but I think people are underestimating their earnings potential, if you take away their "Growth Spending" they will be a lot more profitable and the room for espansion in the US is pretty low, they will be everywhere in the US in a couple more years, all that growth capex will go away and they should improve their margins... On the contrary i'm still a little bit on the sideline with ULTA, they sell expensive items and in the last recession in the GFC they didn't do as well... I will wait probably a SUB 300 price for more margin of safety! Thank you for your work as always Sven! 💪
I agree, stop the dividend, restart the buybacks
thanks for sharing!
I’m having a good ride with Dollarama
good for you!
That 2.30 debt to equity is scaring me I must say. They're not generating enough cash flow.
thanks for sharing!
Can u make an analysis on axfood?
thanks for suggesting, but I have no idea about Swedish retail
I did not get, why the expenses increased so much to reduce the net margin? Buyback should impact only cash.
prices increased likely!
Hi Sven, how do you think the Trump's tarrif plans impacting DG in the longer term? Won't it further squeeze the margins?
we will see!
I find it helps to look at the sector charts from Trump’s first term surprise win in 2016. The patterns in movement seem to be the same: namely, Chinese stocks down significantly, any stock that relies on Chinese trade prices being low, but very little concern about Chinese exposures on the demand side - so Apple prices continue to climb even as the Chinese consumer weakens dramatically. The reality is that Chinese stocks actually climbed dramatically under Trump 1.0 after three or four months. So, I’m trying to capitalize on the Trump tariff fears right now.
Hi Sven. The current CEO, Todd Vasos, has already been CEO from 2015 to 2022. During those years the company improved a lot in terms of sales, earnings and market share price. Now Vasos has returned as CEO. Do you think this could probably mean that he will make the company recover and continue the trend that he started and that seems to have stopped since his departure in 2022?
DG may still have a chance against WMT and am considering buying it a bit more. But, Sven, you can't believe what a CEO says on an earnings call (5:13), can you?...
Agreed!
When the new Fair Labor Standard Act (FLSA) act salary requirements go into effect, DG will be required to pay exempt employees $58k vs the current minimum of $43k salary per year. I.E. Store managers who they consistently require to work 8-30 hours of unpaid overtime per week. $15,000 X 19,400 stores = Dollar General loses another 20% in gross profit per quarter.
thanks for sharing!
Can someone explain to us non USA citizens, how the business model works? How can a small chain be competitive without the economies of scale against Walmart, Costco etc? Do they have some competitive advantage?
it is the cheap bulk things I think±
This is a quality and intresting question! You can study this, with this main question in head. Look up their vision, mission and is it in line with their enterprise strategy, find out strength/ weakness/ oppertunities/ Threats compared to their competitors. Product brands and productlifetime... There is much more to figure out for sure.
All in all its a good approach to find out if its a worthy investment for long term compared to its competitors. But the market is fast and the approach that Sven Does is quick and sticks to its scope. Because the way I set it out now does not "really" fit for investing, because its more like business entrepreneurship, which helps the business but does not particually have to help and increase the price of its stock.
In my opinion you are right, Dollar General doesn't really produce anything and they just sell. So as an investor you are better of to buy its bigger competitor. Also I really like that you asked a very important question for a qualitive study in this comment section, which isn't seen a lot here.
DG stores are smaller than the big stores and they are in locations (often lower income) that the big stores won't build.
DG has stores in nearly every small town in the country. They are very accessible.
Sven, I agree on the value of DG but am waiting for reports as I anticipate lower quarterly earning this year with the stock price taking a hit and lower cost basis. I have held and sold DG in the past and will continue as long as management continues making good decisions.
Thanks for sharing
Thanks Sven!
My pleasure!
Another good Seth Klarman stock is LBTYA which completed a spinoff 2 weeks ago and tanked 50%!
The algorithms seem to have confused it with a stock split because the chart in google is WRONG!
:-) I own that one :-)))
@@Value-Investing nobody ever talks about it!
Have it on my wach list
thanks for sharing
@@Value-Investing And thank you. Keep up the good content. Love when you look at companies.
Exuberance! My broker should have had same outlook before he bought NVO at top. Not enjoying the slide down 😢
thanks for sharing!
@susankara7520
Don't let your broker choose your stocks for you. Do the work!
Unfortunately too much debt. Expecially leasing debt. Cheap retail stocks like Ulta have better Balance Sheets.
thanks for sharing but don't retailers lease their premises
@@Value-Investing But some have much lease debt and others don't
He just crown ignore
@@dialogsemiconductor2039 they only have ~ 6B of actual debt.
Check out note 4 on the most recent 10Q. They're heavily relying on operating leases. If they were capital leases, they'd show up on the bal sheet.
With the new tarrifs i doubt it.
Will be interesting!
Hmm if tariff from China can severely impact dollar store profit for the next 4 yr…..
I am thinking about buying it but after your video and positive analysis & comments LOL. I changed my mind.
Dollar General and Dollar Tree should consolidate. There are way too many of their stores close to one another.
I would rather see one larger store offering more goods than seeing two smaller stores competing against each other from across the street or down the same road.
That would make for better competition against Walmart, Target, etc.
Hello Sven! Thank you for all the valuable videos!
A question about dividend aristocrats and kings, will you cover those? LEG and MO look interesting!
thanks for suggesting, can't make any promises !
@Value-Investing nevertheless, happy to be subscribed, value invested in every video :)
It’s a buy for me.
thanks for sharing
great video,
lets see what happens after 5. dec 2024
I actually added to my $DG position to a total of 100 shares yesterday. Sold a June 20, 2025 $105 covered call for a premium of $415. Easy money really.
Sold a historical CC genius. Just kidding. I think you mean 2025 :)
@@kampfzerG Haha, you are right! Corrected.
Ciao Sven! What about The Italian Sea Group? It might have some issues with tariffs, with Trump's amministration. It has a low p/e like Sanlorenzo. Now has 7.5 nearly p/e
don't know, not my type of investment :-(
How is that different from Malibu boats? It's still recreational vehicles, right? @@Value-Investing
How come you didn't talk about huge debt DG has?
they have leases for their stores!
@@Value-Investing thanks for the insight
With almost certain tariffs coming I don't see any discount retail stores doing well. Especially if they sell cheap stuff from China.
thanks for sharing!
If you look at the breakdown for discretionary vs consumables between Dollar General and Dollar Tree, Dollar General has a 53:47 and dollar general has a 19:81 split (Source CNBC Why dollar stores are sruggling). Tarrifs would hurt discretionary items more than consumables since consumables are food products generally produced in the USA or imported from nearby countries while discretionary are mainly Made-in-china products, so in my mind, tarriffs, if they do pass which I don't think the 10% overall would pass, would hurt dolalr tree more than dollar general so while dollar general might have lower revenues or earnings depending on whether they push costs onto consumers, DG could gain some market share over DT.
@@StarGalaxy123-c7f doesnt dollar tree sell the same type of stuff that DG does?
@@riumudamc4686 Yes but the ratio of what they sell is different. I'm going off of the CNBC report about discretionary vs perishables.
Dollar Tree far better buy for me
thanks for sharing!
Dollar tree cut their guidance, profit is down…I bought Dollarama (Canada) not because their stock price is high, but because the growth is stable, the dividend is going up reasonably with profits, they are expanding into Mexico. Their stores are in better shape than their US counter parts. Their stores are often in the same mall as Walmart, who you would think is their largest competitor...
thanks for sharing!
Its a completely different business. You cannot compare DG to DLTR - they make vast difference in their margins. DLTR deserves like a 4-5x multiples from DG for anything.
Its a completely different business. You cannot compare DG to DLTR - they make vast difference in their margins. DLTR deserves like a 4-5x multiples from DG for anything.
I prefer bitcoin😅
thanks for sharing!
Update for Rubis SCA plz!!
will see what I can do!
Seems pretty beaten up. I don't totally buy the Wal Mart competition narrative either. DG didn't miss a beat during GFC, which says a'lot.
:-)
unless Temu is banned, no point buying DG or DTree
hahahaha
What if you buy now and it keeps on dipping back to $9? 😂
In 2012 Warren Buffett bought KHC for 45 and 12 years later it is at 30 so value investing never works 100% of the time for long term results.
he also bought apple in 2016....
but yes,
4 out of 10 - ok investor
5 out of 10 - great investor
6 out of 10 - GOAT LEVEL
@@Value-Investing Warren never bought apple he had other people on his team make the decision for him since he was still using a flip phone until just a few years ago and does not understand the tech business but he just sold half of apple position yet it keeps going up so he is wrong again.
Lol. He made a mistake buying Kraft at the valuation. It was obvious even he knew at the time. But the valuation for DG is just not making any sense.
@@divyeshpatel5652 His excuse was about valuation but if he bought it for 50% less it would still have been a bad investment. Just because everyone needs to eat and they have big brand name products on all the middle level shelves still does not mean it could be a good investment for the future.
I am worried about trump's tariffs on this stock. How much of their inventory is made in China?
thanks for sharing
@@RonaldRendite it's not just chinese made goods that will get tariffs, things made in India, Thailand, mexico. how much of their inventory won't get hit with import tax?
@@rurutuM so people are gonna stop buying milk and trash bags? Got it.
Sven get clued in not Dollar Store you want to buy Dollarama stock on the TSX in Canada. The Yuan will devalue at least 50 percent against the U.S. dollar and at least 45 percent against the Canadian dollar. If Canada isn't forced to slap 60 percent tariffs on goods coming into Canada from China profits at Dollarama will rise will the falling Yuan. The 60 percent tariffs on Chinese goods coming into America will lower profits at Dollar General but the falling Yuan will counteract some of those lower profits.
thanks for sharing!
unlike the US dollar chains, Dollarama stock is not in a dip.
Price doesn’t = value. The dollar stores in general are poorly ran & have saturated the market in the USA. They have 0 online capacity & lots of debt.
Overtime good companies get cheap due to the market at no fault of their own. Mr Market does its thing.
Daily videos ….. Need material ,I get it.
thanks for sharing!
thanks sven I now know to stay away from DG :)
:-))
🗽 Cheap products from China is over with Trump, I think. But DG now looks cheap.
.
we will see!
debt seems high especially with rates being up and down and unpredictable
Not an issue for them with those cash flows. Look at the maturities, only 750M this year then nothing for several years and they have accumulated cash to pay off the maturity this year. It is why buybacks are on hold.
thanks for sharing!
Agreed. LT Debt went from $4B to $7B in 2022.
Management's cut to earnings forecast doesn't bode well either.
@danaphanous isn't cash 10% of their debt. so not much?
also the signs of recession everywhere with so many places cutting jobs everyday and trump tarriffs coming. very unpredictable future.
@@Pizza-gb1ch Yep, that's why the buybacks are on hold. Was the stupidest thing ever to take on so much debt for expansion AND buy back at highs in 2022. Keep in mind that money also went towards growing the store fleet and expanding square footage a lot, investments, etc, but the mass of buybacks was a mistake.
It is easily serviceable, and locked in at pretty low long term rates as I mentioned, but it was still very dumb to lever up the balance sheet more than needed for buybacks at high evals right as interest rates were starting to rise. My guess is management wanted a bunch of money cheap while the market still loved them, but then got a bit trigger happy when the cash pile was large. Anyway, they are not in danger with those cash flows, but a clear mistake from the past that has contributed to the buybacks being on hold and the stock decline.
Did you watch CNBC (not the television youtube-channel, just CNBC) had a short document about dollar stores? There was interesting points about structural problems of the business model.
yes, that is why the stock is down, if not it would not be as cheap :-)
With the new US administration and all the talk of tariffs won’t that hit DG especially hard since they depend on cheap goods.
I don't see apple crashing, iphones are also made in China!
I don’t like the business clientele. These store rely on the poorest Americans who are most susceptible to any downturn.
hm, we all have to eat
My household income is in the top10% of income earning households in the US and I’m at dollar tree a lot (mainly because there are more locations around me) so while I may be the exception and not the rule I also see what they have there and I think they’ve got great affordable stuff if people just go in there. I love how much smaller it is than say a Walmart and without having to walk around a huge warehouse building. Not pharmacy, fresh produce section, electronics and outdoor or home goods section. It has a lot of what people need for quick things at affordable pricing no matter your income level
maybe wait for reaction from rusland on US rockets in oekraine
thanks for sharing!
😂what does that have to do with DG?
The new tariffs will really affect this business. Any slight rise in prices has an outsized impact on their struggling customer base.
That said, revenues will go down but people still have to eat
hm, we will see!
DG has huge problems not everything is in the balance sheet, they are in debt, salaries are shit and most "cheap products" are cheaper in wallmart and target. Americans slowly have less and less incentive to buy from them and they are no longer cheap they raised the prices also with Trump their business will suffer due to china sanctions (they import a lot of Chinese cheap inventory)
Mr.Doom😂
If you want to protect your money never buy stock in this chanal
thanks for sharing!
90% S&p 500, 5% Gold, 5% Bitcoin, and you are fine
@@srob3645 Im not Fool
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Tariffs will hurt companies like DG,
and the people who shop at DG are about to suffer the most,
so that will not help DG.
thanks for sharing
So people are gonna stop buying milk? Got it.
Tariffs are inflationary, so it's also possible that more people will be turning to discount retailers like DG to save money, especially if there is a recession.
@@thatpointinlife as a percantage of imported goods vs american made, it is mucher higher % of imported in DG, so their costs will rise more, and profitability will be effected in a more dramatic way.
While more people might shop there to save, their original customers will have less to spend, so potentially a wash.
DG does well in small towns without other options, in more suburban areas, there are many other stores with cheaper prices than DG.
In 2020 I looked up the major shareholder in ACTION shop, the European Dollar general I guess, it's 3i group. It 4x since then. It still looks cheap, but price anchoring has kept me from buying more.
I think it depends on your selection pool of stocks, if you compare it with energy, basic material producers, DG is not so interesting. Economic downturn hits hard on retail business, many chinese retail business went bankrupted this year, stores are hard hits.
that is correct, there are some cheap pockets, and we will investigate those