The Dollar Stores Strike Back (DLTR, FDO, DG, NDN)

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If you have watched the markets, and surely you have if you are reading here, then it has been impossible to not notice the sell-off.  But the retail segment has been hit as well as the fears are out that Europe’s woes will come to America, that a double-dip recession is more likely, and on fears that the U.S. job market is not recovering as handily as many would have hoped.  Most retailers have slid 10% or more from their highs after a monumental run-up from 2009 to 2010.  Not the dollar stores.

Dollar Tree Inc. (NASDAQ: DLTR) is up 3% today at $61.48 and its 52-week range is $40.58 to $62.95; , whose shares are down almost 5% at $10.86 today.  Another competitor, FamilyDollar Stores Inc. (NYSE: FDO), is up 3% at $41.50 and its 52-week range is $25.52 to $41.83.  We had an analyst upgrade in Family Dollar and a duel in Dollar Tree this morning.

Even the most recently public (or re-public) Dollar General Corp. (NYSE: DG) is up close to its highs despite the notion that the private equity holders are believed to be sellers at each major rally or at each sale-window date opening.  At $29.30, its high is $30.20.

99 Cents Only Stores (NYSE: NDN) is up 1.3% at $14.41 with a 52-week range of $8.82 to $18.10.  It is the worst performer of the lot.  Maybe it should just change its name to “$1 Dollar Only” for that extra penny.

The logic behind the move is rather simple.  The companies all sell things we need. Food. Toys. Cards. Consumer staples. Paper, and on and on.  Besides, it is always fun to ask the cashiers at the register how much each item costs.

JON C. OGG

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