Subject: Re: FKA: DG
Will you share any thoughts on FIVE?

I have never studied them, so I can't comment. Most of my reading has been on Dollar General, Dollar Tree, or (Canadian) Dollarama.
Some of my insights come from having been a private investor in the business, and insights from the management of that firm. They didn't pass me comments on Five, so I can't pass them along!

Very short precis of my own thoughts--
As of a few years back when I decided to start investing in the public ones, Dollar Tree was considered to be the best merchandiser among the big US players, per my contact's advice. I did well on them many times, as the prices in this sector are very cylical. Then they did a big acquisition at a fairly good price, hoping the poor economics of the acquired stores would converge on the good economics of their existing ones...but it didn't work. The stock price spent some years in the weeds...I did OK, but not outstandingly, at that time as it seemed like there was a free upside to be had if the convergence theory ever worked out.

Since then and until just recently DG has been the better operator: no big acquisition stumble, so all their metrics and their stock price and multiples held up. When they finally, and in a rare move, got relatively cheap I bought in. Then THEY started to stumble on the operating side. The blame is still being put on theft, but I'm not sure how much of it is quite that simple, or how lasting it will be.

Dollarama is a very very good operator indeed. Earnings just keep rising every single quarter, a joy to behold. The stock price is amazingly resilient, so it's almost never on sale, the Costco effect. I bought in once, and did well, but made the mistake of selling when another opportunity came up (as is typical, in a market sell-off everything but those few resilient firms sells off). I did well on the other opportunity, but have spent years waiting fruitlessly for another dip in the DOL price to get back in. Dumb. Currently trading at about 35 times trailing earnings, so maybe a dip is not impossible.

Overall I have made a lot of money on these three in aggregate, but DG in the current cycle is definitely not doing anything for my record. Yet, anyway.

Jim