This discount store beat earnings estimates by three cents last quarter and 12 analysts have increased their 2016 forecasts. Our second recommendation is profit-taking on a previous idea.
Buy: Dollar Tree (DLTR)
From Cabot Undervalued Stock Advisor
Dollar Tree (DLTR) reported third-quarter EPS of $0.81, beating analysts’ $0.78 consensus estimate, and raised its earnings guidance for the fourth quarter and full year, pushing the share price up about 10% this week. Investors had recently been ignoring the stock amid concerns over retail sales. The stock is slightly undervalued with high debt levels.
After joining the Growth Portfolio in April 2016 at 81, DLTR proceeded to rise to 98, fall to 74, and is now rising back towards 98. New investors will probably be able to buy on a pullback below 86. Buy.
Crista Huff, Cabot Undervalued Stock Advisor, www.cabotwealth.com, 978-745-5532, November 23, 2016