Subject: Long DLTR
I've owned DLTR since September 2021. Last year I bought into DG when it initially dropped big time. DG and DLTR later dropped again in the fall months. To take advantage of a tax loss, I sold DG and put it all into DLTR. My reasoning was:
a. DLTR has a profitable business with its Dollar Tree stores.
b. Management has skin in the game (as I recall about 6% of the shares are owned by insiders whereas DG has very little management ownership)
c. DLTR announced it is going to do something with Family Dollar: sell it or spin it out as separate company. Either way, DLTR is creating value by getting Family Dollar away from the core Dollar Tree business.
d. DLTR does a significant business in the party supplies space. Party City's recent demise is sure to be accretive to DLTR revenues. Maybe not 1:1 customer switch over from Party City to DLTR, but any percentage is a net gain to DLTR in profitable incremental volume.
e. DLTR does not pay a dividend. DLTR does have a history of buying back its stock. We do not know what lies ahead in the larger stock market. We may see a major stock market valuation swoon. If so, it is always good to be invested in a low PE valuation company owned by folks with skin in the game and who consistently buy back stock when it is cheap. My investing focus is increasingly on those types of situations.

I do think DLTR may continue in its present valuation range for a long time, perhaps a year, two years or possibly longer. As long as they are making the right moves (doing something to get Family Dollar out of DLTR, buying back shares and improving stores/personnel), I view it as winding a spring that will uncoil positively at some future time.


Uwharrie