In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche
I think Dollar Tree could collapse because many of its customers could have no money because of the Coronavirus Depression. For instance, Statista estimates 10.74 million Americans were unemployed in November 2020. That number rose from 5.81 million in November 2019 and fell from 23.08 million in April 2020.
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Therefore, Clorox is a value trap you need to avoid. I define a value trap as a stock that meets some value criteria but no cash. Hence, that stock could succumb to the death spiral. The death spiral occurs when a company does not generate enough cash to pay its debts.
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An American icon is in big trouble Campbell’s Soup (NYSE: CPB) is in turmoil after sales fell by 7% during
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A true nightmare for dollar stores would be caught in the squeeze between Automated Walmart and Amazon Go. Dollar stores are already caught in the increasingly brutal crossfire between Amazon.com and Walmart.com.
The No-Man’s land between Automated Walmart and Amazon Go would be far worse. A true nightmare for dollar stores would be both retailers using their automated stores as neighborhood fulfillment centers for same-day delivery.
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Expect to see a mass die-off of sick retailers in January and February of 2018 as the dust from the 2017 holiday season settles. If it is anything like last year’s numerous retailers are likely to report losses and more than a few will shut down.
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A milestone has been reached in the world of American retail; Dollar General’s (NYSE: DG) sales are greater than those of Sears Holdings (NASDAQ: SHLD).
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The conventional wisdom is that Dollar General is “Amazon Proof,” but conventional wisdom is often dead wrong about the Everything Store.
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Despite that Dollar Tree’s revenues are still growing, they went from $18.41 billion in April 2016 to $20.92 billion in April 2017. That made for an increase of $2.51 billion but most of that growth can be attributed to the Family Dollar acquisition.
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Between February 2016 and February 2017, Rite Aid’s revenues increased by $2.11 billion. The revenues rose from $30.74 billion in 2016 to $32.85 billion in 2017. There’s a lot of cash flowing through Rite Aid that might make somebody a lot of money if he can figure out how to capture it.
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One thing is for certain, Big Lots was definitely overvalued at the $49.16 a share it was fetching on March 30, 2017. Nothing in its earnings report or holdings warrants that. Not even the 25¢ dividend which shareholders received on March 15, 2017. Stay away from Big Lots, it is overpriced and exposed to dangerous competitors that will soon destroy its business.
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