The firm said it initiated coverage on the discount variety store based on its belief the stock will remain attractive, even if the Family Dollar (FDO) deal does not go through.
"Although much of the investor focus has been on the potential to win Family Dollar shareholder approval to acquire Family Dollar on December 23 (which is an accretive deal in its current form), we believe the even without the deal that shares are attractive from a valuation standpoint," the firm said.
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Separately, TheStreet Ratings team rates DOLLAR GENERAL CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate DOLLAR GENERAL CORP (DG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."