Wednesday, October 12, 2011

Analysts pick Dollar General for growth, value

Trading at 13 times forward earnings – a premium to the S&P 500, Dollar General is set to grow its earnings abut 17% over the next four years.

Stock analysts are picking it, even though it is trading at near 52-week highs.

Here is why Warren Buffet bought 1.5 million shares during the last quarter, and so did other hedge fund managers, according to SEC Form 13F filings of funds over $100 million in assets.

Though the company is much smaller than Wal-Mart with a market cap of $11 billion compared to the big box giant's $108 billion cap, a basket of 102 items purchased by Avondale Partners priced out 9% lower at Dollar General. The outfit will open 550 new stores this year, and it's trading at 32, compared to its all-time high of 35 after falling with the rest of the pack during June through August.

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