Why Family Dollar Stores (FDO) Stock Continues To Rise Today

NEW YORK (TheStreet) -- Shares of Family Dollar Stores Inc. (FDO) are climbing higher by 24.76% to $75.68 on heavy trading volume on Monday afternoon.

Family Dollar, a discount retail chain, is continuing to gain after announcing that Dollar Tree Inc. (DLTR) is purchasing the company for $8.5 billion.

The transaction creates the largest discount retailer in North America, Reuters reports.

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The merger is expected to close in the early part of 2015.

The 13,000 stores Dollar Tree will operate are predicted to bring in sales of more than $18 billion per year, the companies said.

Dollar Tree stock is higher by 3.38% to $56.05 on heavy volume this afternoon.

Separately, TheStreet Ratings team rates FAMILY DOLLAR STORES as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate FAMILY DOLLAR STORES (FDO) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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