Raising Cash by Exiting DollarTree
Dollar Tree, Inc. (DLTR) is an operator of discount variety stores. As of January 28, 2012, the Company operated 4,351 discount variety retail stores. Its stores operate under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant and Dollar Bills. As of January 28, 2012, it operated 4,252 stores in 48 states as well as 99 stores in Canada. During the fiscal year ended January 28, 2012 (fiscal 2011), the Company opened 278 new stores.
[PostStockWidget stock_valuation="" pricetype="live" manual_date="Dec. 21, 2012, 2:04pm GMT" symbolcodes="'DLTR'" symbolprices="90" div_align="right"]
According to the Purple Chips model, we identified a low valuation in DollarTree DollarTree Finds Itself in the Bargain Bin just a few weeks ago on February 16, 2013 at $39.
We are concerned about the lack of low valuations in the market; therefore we have searched through our holdings for stocks that are most likely to pullback if markets decline. DLTR is a great operator but rose quickly after our recommendation, pays no dividend and is not a Top-25 Purple Chips holding, therefore we think it is a suitable candidate to take profits on.
We emphasize that it has not reached the high valuation target but we think the odds are good that we will be able to buy again at a lower valuation.
EXIT DOLLARTREE AT $USD 45.00 (DLTR-US, $USD 45.07)
Our return on this trade is 15.9% in less than one month.
