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Steve Mandel Grows His Dollar Tree (Stake, That Is)
Posted by: Dianne Tordillo (IP Logged)
Date: December 17, 2012 05:07PM
After selling out of his entire stake in discount retailer Dollar Tree (DLTR) in the fourth quarter of 2011, Lone Pine Capital’s Steve Mandel bought back his stake in the third quarter, and then generously increased his shares by more than 200 percent; the recent transaction was reported Dec. 10 on GuruFocus Real Time Picks.
Mandel’s recent move on Dollar Tree positions him at 5.2 percent of shares outstanding, compared to third quarter’s 1.69 percent. The recent purchase just about triples his third quarter holding. He reported about 3.9 million shares in September, whereas he now has 11.8 million shares of the company’s stock.
Dollar Tree has a market cap of $9.17 billion. It prospers in the idea of selling extremely low-priced items in all of its 4,630 stores in 48 states and 5 Canadian provinces. Its stock is up almost 2 percent this afternoon, trading at $39.26.
Dollar Tree reached its three-year peak right before the start of the third quarter, trading around $56, and has since been in a downward trend after its peak.
Year to date, Dollar Tree’s market value has depreciated by 6.59 percent, especially so in October when its price dropped from $46 to $39.
DLTR data by GuruFocus.com
About a month after the price drop, Dollar Tree director Conrad M. Hall purchased shares of the stock after a six-streak selling spree from several other Dollar Tree insiders. Purchases appear rare in the company’s insider activity.
Dollar Tree’s main competitor, Dollar General, is trading a few dollars higher than Dollar Tree, around $43 today, and is down 0.32 percent. It, however, has gained in value year to date, by 7.06 percent.
Conveniently, Mandel owns both retail stocks. Upon presenting Dollar Tree as a new buy in the third quarter, he also added to his Dollar General stake by 124 percent.
Dollar Tree is ranked positively in Business Predictability by GuruFocus, graded 5 stars whereas Dollar General lacks a rating at all.
Dollar Tree’s revenue growth has maintained positive numbers in the last decade, as with its EBITDA, book value and free cash flow, according to its 10-Year Financials. Dollar Tree has a 9 in Financial Strength and an 8 in Profitability and Growth on GuruFocus.
View the rest of Mandel’s latest trades at Steve Mandel’s Stock Picks. Also read more on related topics in our GuruFocus archives
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Guru Discussed: Steve Mandel: Current Portfolio, Stock Picks
Stocks Discussed: DLTR, DG,