Dollar Tree (DLTR) is one stock that's having a good year in 2011. Actually, the firm is having a great year -- shares have rallied more than 38% since January.
As the largest deep discount retailer in the country, Dollar Tree has been one of the biggest beneficiaries of a rough economy. As consumers traded down to less expensive shopping options, Dollar Tree attracted a whole new demographic of shoppers to its more than 4,000 locations. Because the firm's draw is "everything for $1," supply chain management is crucial; the company is already expert at keeping costs down from the time it purchases inventory to the time it hits store shelves. As a result, net margins have consistently rung in above 6% -- hefty profitability for any retail name.There's been some concern that dollar store concepts will become less relevant as consumer spending ticks higher. While that's a serious concern, Dollar Tree's introduction of its higher-priced Deal$ concept should help to bridge that gap and keep shoppers spending cash at the firm's stores. With increasing analyst sentiment this week, we're betting on shares. Dollar Tree, one of TheStreet Ratings' top-rated multiline retail stocks, shows up in various professional portfolios on Stockpickr, including Blue Ridge Capital's and Lone Pine Capital's as of the most recently reported period.
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