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Shrewd investor: I have Shrewd'm!
- Anonymous Shrewd
- Manlobbi
Halls of Shrewd'm / US Policy❤
No. of Recommendations: 5
Woo-hoo, DG hit my looked-for target of 110. Sure looks like a general washout today.
No. of Recommendations: 7
That's simply not fair! 4 likes for this and I got 0 for 115 buy price comment even after doing analysis picking out the price for DG on the Berkshire Board. I want my likes!
No. of Recommendations: 2
4 likes for this and I got 0 for 115 buy price comment even after doing analysis picking out the price for DG on the Berkshire Board.
It's hard to find that post on the Berkshire board, among all those annoying posts unrelated to DG! Could you point us there? Or recopy it to this board?
dtb
No. of Recommendations: 4
4 likes for this and I got 0 for 115 buy price comment even after doing analysis picking out the price for DG on the Berkshire Board.
Ha! Wait 'til you see the likes that come in when somebody makes the pound-the-table buy-buy-buy call when it hits 90.
No. of Recommendations: 3
Tongue firmly in cheek!... a play on mungo and dealraker.
I'm not here for likes, I'm here to learn and have my ideas dissected good or bad.
Just ignore me, it's Friday afternoon fun 😂
No. of Recommendations: 2
And my point being, less group think, more debate and opposing viewpoints can ultimately lead to better decision making.
No. of Recommendations: 3
That's simply not fair! 4 likes for this and I got 0 for 115 buy price comment even after doing analysis picking out the price for DG on the Berkshire Board. I want my likes!
Very funny!
It's hard to find that post on the Berkshire board, among all those annoying posts unrelated to DG! Could you point us there? Or recopy it to this board?
Even funnier!!
The only thng that isnt funny is the continued decline in DG share price. There is an analys out with a Reduce / 102 price target recomendation. Maybe my 100 back-up the truck target is not aspirational enough. 90?
Btw, I had a long drive up through VT yesterday; noticed several DGs on the way. A couple were open quite late at night. That seemed encouraging in terms of staffing.
No. of Recommendations: 0
When I say I bought, I must disclose I only purchased a 0.01% position. I'm not sure that even counts as dipping a toe in!?
No. of Recommendations: 3
I think looking at rear-mirror for price guidance is a mistake. Is $110 really cheap for DG? It's estimated earning for 2023 is under $8 and given the not-so-bright prospect for retail business in the near future, why wouldn't DG be traded at 10 PE Of estimated earning?
No. of Recommendations: 16
Can we flip the discussion: Why should it trade at 10 times projected 2023 earnings? I'm having trouble understanding why it would, particularly given that it continues to grow revenue at a decent clip despite the recent setbacks, and given that it continues to show it is able to generate profits even in less than ideal circumstances.
Among other things, 10 times P/E is well below the average market multiple, and is nowhere near a multiple DG has ever traded (today's price is looking at the forward P/E, which is still at about 14 and change forward P/E). If there is some reason the future will be drastically different than the past, what is that reason?
Even a struggling firm like Target is, as of today, over 15 P/E. Walmart & Costco blow that away, despite being 'retail'. Profitable grocers such as Kroger do as well. It may be that DG is maturing, growth prospects are slowing, profit margins will come down, and its average multiple will come down as a result. But I don't understand why we'd anchor the discussion on whether 10 P/E is the right P/E.
If we want to hash out a bear case, I think it's far more likely that EPS comes down or stabilizes in the $7-8 range (due to things like increasing competition and an increasing cost of labour), or worse, and the firm trades at 15 P/E from that multiple (like Target today).
But, if so, I'd like to hear the case as to why DG's ability to generate profits is in secular decline. The more obvious explanation to me is that DG is experiencing something very similar to what it did in 2008/09 -- a temporary dip in margins arising from a cash-strapped customer base (hence the move to consumables, etc., in recent quarters).
No. of Recommendations: 1
<Can we flip the discussion: Why should it trade at 10 times projected 2023 earnings? I'm having trouble understanding why it would, particularly given that it continues to grow revenue at a decent clip despite the recent setbacks, and given that it continues to show it is able to generate profits even in less than ideal circumstances.>
I should say I am not sure about DG since I haven't shopped there. I bought foot locker about 5 years ago, it went up and down a few times, fortunately I sold it break even or event made a profit. All I can say is retail is hard and unpredictable. How many famous retailers had gone out of business in the past few decades? It's almost like restaurants, there're many choices.
No. of Recommendations: 2
If you're interested in value chains elsewhere, in the UK we have poundland which is privately owned and B&M which is part of the FTSE100 with revenues of c£5bn and net income of 300 to 400m. I've not looked at B&M before but they've also expanded into France with an acquisition of 104 shops called Babou.
From Google
"SAS Babou operates as a discount store. The Company offers clothes, shoes, lingerie, bags, hats, kitchen appliances, bathroom accessories, plastic storage cabinets, electronics, interior products, towels, furniture, and household goods. Babou serves customers in France."
Perhaps Jim's wife shops there. Probably don't have an outlet in Monaco though....
Personally I think retailers in the US can make a better go of it. Property costs in the UK are high. Rates, taxes, rents etc. That's why we have empty retail units in town centres everywhere.
No. of Recommendations: 2
Yo dude! Likes are the goal for most here, but making money or not losing it tends to be. But that like tab controls the discussion, and DG got the go ahead from Jim and thus off it went.
I was protesting both the idea that DG was a hero buy (by a board hero) and protesting that it had zero to do with Berkshire. In the end it had a lot to do with groups and social proof.
Blackswanny you, like me, make your best buys in a closed off room with no one there and no chants of approval.
The world...investing 101. Basic common sense; logic; not needing Jim holding your hand.
Where's Jim on this thread by the way?
No. of Recommendations: 9
Craig, please don't repost his bad posts, some of us block him for his behavior. It also validates the behavior. It's a shame, he had good investment comments. I hope he gets has act together and I can unblock him.
No. of Recommendations: 7
Everything has its price and I think DG is a reasonable prospect from here on a 3 year view, (perhaps)
Things are simpler for me at the moment, happy with my portfolio of longer term compounders (coffee can)I'm just adding per month from my pension contributions atm. I have a watchlist and add per month and DG is on that list, also DIS. I've also been reviewing Brookfield BN as an accumulation op. I wouldn't put a lump sum into any of these as I did with Alphabet as they're more "fringe value" convictions for me.
I read the morningstar review recently and I find myself nodding in agreement.
"For the second straight quarter, narrow-moat Dollar General posted lackluster earnings, cut its guidance, and was punished by the market for its shortcomings. The firm's core customer remains under pressure, acutely sensitive to sticky inflation in non discretionary expenses, and pulled back on purchases in the more cyclical seasonal (negative 1%), home goods (negative 7.7%), and apparel (7%) categories in response. While we expect to lower our own $191 intrinsic valuation by a mid-single-digit percentage'consistent with higher-than-expected shrink, a 2.25% reduction in full-year revenue guidance at the midpoint (to 1.3% to 3.3% from 3.5% to 5%), and a material downgrade in expected profitability'we continue to view issues as ephemeral rather than structural and see significant long-term opportunity in the name."
