Sell a Quarter Position in Dollar Tree (DLTR)
I’m recommending that we take a one-quarter profit in our position in Dollar Tree (DLTR).
The stock has risen by almost 20% since our initial recommendation in the May issue of the Cabot Turnaround Letter. The latest show of strength was courtesy of the company’s strong Q1 earnings report, which featured a 5% year-on-year sales increase and a 2% same-store sales hike (including growth in the consumables, seasonal, home products and apparel categories). Earnings of $1.78 per share increased 8% and beat estimates by 29 cents.
The company also raised its full-year EPS forecast by 10 cents to a midpoint of $5.50 and increased its sales growth projection to 4.5% (from 3.5% previously) and sees same-store sales growth of around 2% (compared with the prior 1.5%).
After taking the partial profit, we’ll retain the remaining three-quarters position with a Hold rating. SELL A QUARTER.
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