Dollar Tree (DLTR)
Click to Enlarge After a tepid earnings report in February, Dollar Tree (DLTR) bounced back with a solid first-quarter report last week. Earnings were up more than 11% year-over-year, while revenue was 7.2% better.
Less than a week later, DLTR stock received an upgrade from “neutral” to “buy” at Sterne Agee. The stock, which has been trading between $50 and $55 since the beginning of 2014, was given a $61 target price — a good 15% higher than its then-current price.
OptionMonster.com noted that call buying was very brisk on DLTR, reflecting a bullish outlook.
Dollar Tree shares trade at 19 times earnings and boast a return on equity of nearly 40%. Of the three stocks in the dollar-store sector, DLTR is the only one that has improved (+3.4%) in the past month, and it has handily bested the other two in performance over the past three, six and 12 months.
One small negative: DLTR does not pay a dividend.