Dollar Tree Stores Inc. (DLTR): Today's Featured Services Winner

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Dollar Tree Stores ( DLTR) pushed the Services sector higher today making it today's featured services winner. The sector as a whole closed the day down 0.5%. By the end of trading, Dollar Tree Stores rose $1.94 (5.1%) to $39.70 on heavy volume. Throughout the day, 10.2 million shares of Dollar Tree Stores exchanged hands as compared to its average daily volume of 3.6 million shares. The stock ranged in a price between $38.45-$40.01 after having opened the day at $39 as compared to the previous trading day's close of $37.76. Other companies within the Services sector that increased today were: Bluegreen Corporation ( BXG), up 55.6%, China Auto Logistics ( CALI), up 33.5%, China Armco Metals ( CNAM), up 26.3%, and Lentuo International ( LAS), up 16.3%.
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Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise at the fixed price of $1.00. Dollar Tree Stores has a market cap of $8.69 billion and is part of the retail industry. The company has a P/E ratio of 16.8, below the S&P 500 P/E ratio of 17.7. Shares are down 9.3% year to date as of the close of trading on Wednesday. Currently there are nine analysts that rate Dollar Tree Stores a buy, one analyst rates it a sell, and nine rate it a hold.

TheStreet Ratings rates Dollar Tree Stores as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

On the negative front, Frozen Food Express Industries ( FFEX), down 41%, Safe Bulkers ( SB), down 25.5%, LodgeNet Interactive Corporation ( LNET), down 22.3%, and Lee ( LEE), down 20.5%, were all laggards within the services sector with News Corporation ( NWS) being today's services sector laggard.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the services sector could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the services sector could consider ProShares Ultra Short Consumer Sers ( SCC).

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