Dollar General And Dollar Tree Insiders Take Advantage Of Gloomy Sentiment

• Dollar Store insiders have bought shares while analysts downgrade the stocks.
• These two discount retailers posted disappointing quarterly results back in August.
• Their share prices have dropped sharply since then but are still up year to date.

Both Dollar General Corp. DG and Dollar Tree, Inc. DLTR turned in disappointing quarterly results back in August, and their share prices have shown it by dropping in the double-digit percentages since then. The S&P 500 is essentially flat in that time.

Dollar General

It's perhaps no big surprise that Goldman Sachs has soured on the discount store space, though the analyst at Argus did see some opportunity in a format change. The company's market capitalization is near $20 billion, and offers a 1.4 percent dividend yield. Shares are down more than 14 percent in the past month, and the stock closed at $72.02 on Tuesday, which was below that director's buy-in price.

See also: Penske Automotive And Norwegian Cruise Line CEOs Make Big Bets On Their Companies

Dollar Tree

Also last week, a pair of Dollar Tree directors purchased a total of more than 6,000 shares of the company. At prices between $85.00 and $85.60 per share, that added up to almost $553,000. As mentioned, Goldman Sachs preferred Dollar Tree, citing its growth potential, and it added the stock to its Conviction List.

This Virginia-based discount retailer has a market cap of less than $20 billion, but it does not pay a dividend. Its short interest was about 4 percent of the float in the most recently reported period.

Shares closed on Tuesday at $83.28 apiece, again below the buy-ins, and the stock is around 14 percent lower in the past month. However, shares are still up almost 8 percent year-to-date.

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