Breaking a Dollar

 | Oct 18, 2012 | 4:02 PM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:




Once they crack something, it stays broken -- and it stays broken for a long time.

I am thinking about the way all dollar-store stocks have been crushed ever since Dollar Tree (DLTR) said things had gotten weaker. This group had been among the strongest sections of retail. It had been THE way to play the weak consumer.

Suddenly, though, the consumer's considered robust and able to gravitate from Dollar General (DG) and Dollar Tree (the really hammered players) and go to Wal-Mart (WMT) or Target (TGT).

What's incredible about the move out of these stocks is that it really doesn't matter what the companies say from now on. They can't rebut the presumption that business is going to get bad.

What's ironic is that many of us have seen this movie before. It's what caused Dollar General to go private in the first place. The total disrespect the stock's getting now is reminiscent of that what happened back then.

More important, once a stock without yield falls out of favor in this market, it's "Katy bar the door," especially when there is a rotation into the industrial names and the high-end retailers.

In other words, when these stocks start going down, it becomes very difficult to reverse.

They are one more reason why I am drawn to dividends, which provide a break from this kind of selling that is so vicious that it can't be gotten in front of. They make it mighty hard to own anything that's out of favor because once out of favor, there's no stopping the decline.

Columnist Conversations

View Chart »  View in New Window »
this chart is showing great bullish signs here, we like this to take out the old high shortly. ...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.