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Dollar Tree(DLTR - Get Report), an operator of discount variety stores offering merchandise at the fixed price of $1, is considered a great stock to own during slow or tough economic times. This stock is off to a decent start in 2011, with shares up over 18%.
Dollar Tree has a market cap of $7.98 billion and an enterprise value of $7.82 billion. The stock currently trades at a trailing price-to-earnings of 18 and a forward price-to-earnings of 14. This company has a decent amount of cash on its balance sheet, with over $510.30 million of cash and $266.50 million in total debt. That leaves it with a net cash position of $243.80 million.
A director just
bought 5,000 shares, or $325,900 worth of stock, at $65.18 per share. It's also worth mentioning that two other DLTR directors have sold over $1 million worth of stock during the month of June.
From a technical standpoint, this stock just recently broke out above some past overhead resistance at around $63.75 to $64.50 a share. As long as this stock can hold above those breakout prices, then one could buy this name on any pullback with a tight stop in place in case the breakout fails. If the breakout fails and you still like this stock, then look to buy it closer to some big previous support at around $62 to $61 a share. If the stock starts basing around those levels, then it could mean it's a popular price point where large traders like to buy the stock.
Keep in mind that this stock has been displaying relative strength during the recent market slide. Shares of DLTR just hit a brand new
52-week high of $66.51 a share today. That's impressive strength for any stock in a weak market, and it shows that traders flock to this defensive name in uncertain environments.
Dollar Tree, one of TheStreet Ratings'
top-rated multiline retail stocks, is a top holding in the
Lee Ainslie's Maverick Capital portfolio.