Subject: Re: Q2 earnings tomorrow...
Results: https://investor.dollargeneral...

Everything looks pretty good to me, so it's not really clear why the share price is down a bit. Net margin at 3.84% is quite a bit better than what I was expecting, and net sales up 5.1% is pretty good too, coming from growth in same store sales (2.8%, itself from 1.5% increase in traffic and 1.2% increase in average transaction amount), plus growth from new stores. Dividend unchanged at $0.59 per quarter, no intention to repurchase shares, and they have increased their projections for full year earnings from $5.20-$5.80 to $5.80-$6.30.

$1.86 EPS replaces last year's $1.70, so trailing 12 months' EPS is now $5.40, putting them at 20.6x ttm earnings. Their earnings are not particularly different from one season to another, so if they can keep producing earnings at the rate of their last 2 quarters, $1.78 and $1.86, they would have $7.28 in earnings, and be trading at 15x.

Not much of a bargain, if you ask me, but I am holding my small stake (less than 1% of my portfolio) in the hope that the rebound might continue and because they are a bit of a hedge against a recession ('antifragile'), and tend to go in the opposite direction of the rest of the stock market.

dtb