Dollar Tree Stores

Dollar Tree Stores ($27.50) is an operator of discount variety stores where every item in the store sells for $1.00. The company operates 2,674 stores in 48 states. In both the Malls this writer goes to in Toronto and in Florida the only store in either Mall that always has a line up at the cashier is the Dollar Store. The information we have is that the average purchase is about $6.00. So 500 customers a day produces $3000 per day or $1,100,000 per year. Even selling at $1.00 it adds up. The stock is selling to-day at the same price it was in 1998 despite the earnings going from 73 cents to an estimated $1.90 this year; and the book value from $2.67 to $11.90. Dollar Tree gets a #1 rating from us and the rating number is 0.97; and the earnings have gone up every year (except one) for at least the past 11 years; our expectation is for a move to $70 to $75 in the 3-5 year term.