Trade-Ideas LLC identified

Dollar General

(

DG

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Dollar General as such a stock due to the following factors:

  • DG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $333.2 million.
  • DG has traded 471,599 shares today.
  • DG is trading at 2.40 times the normal volume for the stock at this time of day.
  • DG is trading at a new high 3.00% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in DG with the Ticky from Trade-Ideas. See the FREE profile for DG NOW at Trade-Ideas

More details on DG:

Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, midwestern, and eastern United States. The stock currently has a dividend yield of 1.4%. DG has a PE ratio of 17. Currently there are 13 analysts that rate Dollar General a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Dollar General has been 4.4 million shares per day over the past 30 days. Dollar General has a market cap of $18.9 billion and is part of the services sector and retail industry. The stock has a beta of 0.88 and a short float of 2.3% with 1.39 days to cover. Shares are down 9% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Dollar General as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • DG's revenue growth has slightly outpaced the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 7.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • DOLLAR GENERAL CORP has improved earnings per share by 14.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DOLLAR GENERAL CORP increased its bottom line by earning $3.50 versus $3.17 in the prior year. This year, the market expects an improvement in earnings ($3.93 versus $3.50).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Multiline Retail industry average. The net income increased by 12.4% when compared to the same quarter one year prior, going from $251.26 million to $282.35 million.
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.09 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Multiline Retail industry and the overall market on the basis of return on equity, DOLLAR GENERAL CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.