Trade-Ideas: Dollar Tree Stores (DLTR) Is Today's New Lifetime High Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Dollar Tree Stores ( DLTR) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Dollar Tree Stores as such a stock due to the following factors:

  • DLTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $85.1 million.
  • DLTR has traded 1.6 million shares today.
  • DLTR is trading at a new lifetime high.

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More details on DLTR:

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise at the fixed price of $1.00. DLTR has a PE ratio of 20.6. Currently there are 10 analysts that rate Dollar Tree Stores a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Dollar Tree Stores has been 1.4 million shares per day over the past 30 days. Dollar Tree Stores has a market cap of $13.0 billion and is part of the services sector and retail industry. The stock has a beta of 0.06 and a short float of 6.6% with 10.07 days to cover. Shares are up 43.3% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Dollar Tree Stores as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, notable return on equity, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • DLTR's revenue growth has slightly outpaced the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 8.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • DOLLAR TREE INC has improved earnings per share by 9.8% 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 TREE INC increased its bottom line by earning $2.70 versus $2.03 in the prior year. This year, the market expects an improvement in earnings ($2.82 versus $2.70).
  • 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, DOLLAR TREE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $171.00 million or 17.68% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.47%.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 46.12% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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