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TheStreet Open House

A Well-Rooted Retail Investment

Stocks in this article: WALDLTR

Performance

Let's take a quick look at the performance of DLTR by looking at my Best Stocks Now! App. Over the last five years, DLTR has averaged 35% returns to investors per year. Over the last three years DLTR has delivered 32% per year. Over the last 12 months DLTR is up 19% and it's starting to outperform the market again.

Data from Best Stocks Now App

Now let's go back to 2008 when the market was down 38.5%. DLTR was up 61% that year! So what ranking do you think it would have had in 2008 (my app wasn't functional then)? I know that it would have been a top-rated stock that year. It is all relative.

Valuation

DLTR's performance has been sensational. Now, just for fun, let's compare its performance with that of Wal-Mart.

Over the last one, three and five years, DLTR has been cranking out returns of about 30% to 35% to investors. WMT, on the other hand, has been cranking out only about 6% per year. It's all about earnings growth.

Earnings growth translates into stock price appreciation. When earnings start to slow down at a company and it's no longer hitting double digits, no matter who you are, the stock price appreciation is going to follow right along. This is why you have to be invested in the Best Stocks NOW!, not big recognizable names of yesteryear.

Data from Best Stocks Now App

Wal-Mart was once a Dollar Tree -- it was growing rapidly. And now you ask yourself 'Why didn't I get on the Wal-Mart bandwagon in the early days?' Well, I'm giving you all these stocks on a daily basis that are in the early days now.

Too many people follow the rule of avoiding stocks that are hitting a new highs. In fact, just the other day someone asked me why I would buy a stock (like DLTR) that is just hitting new highs. Well, DLTR has been hitting new highs for the last 10 years. You'd never buy this stock if you followed that rule.

I would rather own a stock that is hitting new highs than one that is going sideways.

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