Get a Stock Bargain at Family Dollar

Dollar-concept stores have attracted my attention in the past. Dollar General (DG - commentary - Cramer's Take) -- Bargain Buy at Dollar General -- and Dollar Tree (DLTR - commentary - Cramer's Take) -- Money Grows on This Dollar Tree -- have both risen since I wrote about them. Now I'd like to check out another company in the dollar-concept retail space that's poised for a move up, Family Dollar (FDO - commentary - Cramer's Take).

A Solid Operator

If you visit enough dollar-concept and variety discount stores, you won't have a hard time separating the wheat from the chaff. On the lower end, the stores are messy, poorly managed and loaded with outdated and obsolete inventory. That's a recipe for a truly lousy shopping experience, particularly considering that these stores aim to offer basic household and personal items.

On the other hand, venture into a dollar-concept location that's bright, clean and well managed, such as Family Dollar, and you're in for a shopping experience that will have you coming back.

Family Dollar was founded in Charlotte, N.C., in 1959. The first store was relatively small and located just around the corner from its key markets, low- and moderate-income families. The store offered everyday merchandise that satisfied the basic-goods needs of its shoppers at affordable prices.

Stop by a Family Dollar store today and you'll see that the core concepts that ignited its success in the beginning -- including a large assortment of variety-store staples across a no-frills, low overhead, cash-and-carry store platform -- are still hard at work today.

In fact, with more than 6,300 stores in 44 states, Family Dollar is one of the fastest-growing discount store chains in the U.S. With good reason: The merchandise mix, which includes just about everything from consumables to apparel to food, is attractive, with price points in the key $1 to $10 range.

Reasoned Renewal

But what I really like about Family Dollar is how it continues to remake itself in subtle ways while not straying too far from the core values that got it to where it is today.

---

At the time of publication, Burritt had no positions in any of the stocks mentioned in this column, although positions may change at any time. Wayne Burritt is president and director of equity research for Burritt Research, which operates BurrittResearch.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Burritt appreciates your feedback; click here to send him an email.