Charles Payne: 3 Stocks, Charles' Choice

Dollar Tree (DLTR) leads the list of top losers so far today and is now at $40.93, down $0.98 (-2.34%) on volume of 185,599 shares traded. Over the last 52 weeks th...(Click the story link or go to http://www.marketintelligencecenter.com for the full story)

'Twas the Day After Christmas...Early holiday results are in for retailers and they aren’t pretty. Deep discounts and last- minute shoppers failed to revive the season with sales shrinking across most categories according to the Wall Street Journal.In data provided by MasterCard’s SpendingPulse total year-over-year sales excluding automobiles dropped 5.5% in November and plunged 8% in December. Excluding the decline in gasoline sales the numbers are little easier to stomach - down 2.5% in November and 4% in December. From the Bull Pen: Companies like Dollar Tree (DLTR) are the ones with the right business models as we head ...

Dollar Tree (DLTR) shares are down so far today, after a Goldman analyst cut the shares to a sell. The analyst sees limited upside for the discount retailer following its strong year in 2008. If there is any downside versus the current 2009 consensus this likely result in multiple contraction and downside for the stock to [...]

The ever-weakening economy is driving consumers to lower and lower priced goods. It is called the "trade-down economy" where people buy cheaper goods rather than nothing at all. That is great for the dollar stores. But this morning there was a downgrade of Dollar Tree Inc. (NASDAQ: DLTR) by Goldman Sachs which might raise some eyebrows.

Filed under: Earnings reports, Wal-Mart (WMT), Family Dollar Stores (FDO)

Family Dollar Stores (NYSE: FDO), a retailer that competes with Dollar Tree (NASDAQ: DLTR) and Wal-Mart Stores, Inc. (NYSE: WMT), reported earnings for the first quarter on Wednesday, and the market couldn't have been happier. As I was writing this, the stock was trading up over 13% on very nice volume. But, is 13 an unlucky number in this case? Would those buying in now be buying in too high?

Well, I can understand the euphoria surrounding the stock rise. To begin with, Q1 earnings beat estimates by two pennies. They came in at $0.42 per share, and that represented a double-digit growth rate for the bottom line of over 13% (there's that unlucky number again!). Top-line sales of approximately $1.8 billion essentially met expectations. When you think of Family Dollar's business and marketing model, you can understand why it's doing well. We're in one of the worst recessions ever, and people are looking for cheap prices on everything. I'm not the biggest fan of dollar-store businesses (for instance, I don't think I'd buy foodstuffs for a buck), but I do shop at them from time to time and can appreciate the allure. I think you can also understand why the stock is performing as well as it has been today: on top of the earnings beat, Family Dollar was the greatest S&P stock story of 2008 according to this source.

Here's the big question on everyone's mind: Is Family Dollar still a buy? If you're currently trading strength, I think you could buy this one after a pullback and then ride the stock to its 52-week high of over $32 per share. I see no reason why it won't make that level, especially if economic conditions continue to worsen (did I say if?). However, I certainly wouldn't be a buyer of today's rally. I think there's momentum behind this name, but I'll say this -- there are probably better bargains out there for any profit you might make from a trade on Family Dollar. So if you do make some bucks on it (pun intended), I'd probably take the profits and allocate them elsewhere. I'm just not sure that Family Dollar will be the best performer in '09 as well.

Disclosure: I don't own any company mentioned, but positions can change without notice.

Can you still buy Family Dollar Stores? originally appeared on BloggingStocks on Wed, 07 Jan 2009 16:00:00 EST. Please see our terms for use of feeds.

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Throughout this consumer-led recession, we've seen the trading-down from specialty goods and name brands to generic goods and discount items, not out of choice, but necessity. Wal-Mart (WMT) has seen strong sales, and that trend should continue. But I'd take it a step further and take look at dollar stores. Family Dollar (FDO) posted strong results and raised their profit outlook. There aren't many companies doing that right now. "The company expects full-year sales to rise 4 percent to 6 percent, up from a prior outlook of 3 percent to 5 percent. On a same-store basis, it forecast a sales gain of 2 percent to 4 percent; it previously called for a rise of 1 percent to 3[More...]

It was a nightmare of a year for the retailers in 2008. It doesn’t look like the start of 2009 will be much better for them. After a whopping 160,000 stores closed in 2008 I am expecting many more closings to follow in January and February. You see, many of these “ailing retailers” won’t tip their ...

I used to, and will one day return, to posting the best performing stocks of the week - but the wicked volatility and "student body left" trading of the past 4 months has made it a moot point. Everything must either be bought or sold, as stocks are either deemed "good" or "bad" that hour, day, or month. The herd piles in, or piles out - regardless of sector, style, fundamentals. It's been a market of asset allocation not individual stocks much of the back half of the year. I like to look for relative strength and ride sector/company trends for the longer term - this market is not for that sort of investor. This has been for many months a run and gun daytrader environment; not a place for theme investors. With that said, I am always curious to see what stocks held up over the long run... folks, no matter what happens (short of 8%+ rally here in the next 3 days) we are projecting the worst year in the markets at least since the[More...]

Filed under: After the bell, Earnings reports, General Motors (GM), Toyota Motor Corp. (TM), Market matters, Palm Inc (PALM), Oil

Today's weakness could be blamed on overseas weakness, or it could be blamed on the auto industry -- GM and Toyota especially. But the general feeling after watching equities on the first day of a Christmas-shortened week was that sellers were merely taking out extra cash so they could buy better presents. The roll-over in oil from last week's sub-$35 took us north of $42.00 for February NYMEX crude, but that quickly came back under $40 again.

Below are today's unofficial closing bell levels:
DJIA: 8,519.69 -59.42 -0.69%
NASDAQ: 1,532.35 -31.97 -2.04%
S&P 500: 871.63 -16.25 -1.83%
Top Analyst Upgrades
Top Analyst Downgrades

Dollar Tree Inc. (NASDAQ: DLTR) was cut to Sell by Goldman Sachs, but even worse, it was added to the CONVICTION SELL LIST. After shares ran so high this year, they were down over 4% at $41.80 right before the close.

Continue reading Closing Bell: Stocks end lower; DLTR, GM, TM, PALM

Closing Bell: Stocks end lower; DLTR, GM, TM, PALM originally appeared on BloggingStocks on Mon, 22 Dec 2008 16:14:00 EST. Please see our terms for use of feeds.

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