Director At Dollar Tree Buys $149K of Stock

Disclosed in the latest SEC filing, a significant insider purchase on July 3, involves TIMOTHY JOHNSON, Director at Dollar Tree DLTR.

What Happened: In a Form 4 filing on Thursday with the U.S. Securities and Exchange Commission, it was disclosed that JOHNSON bought 1,477 shares of Dollar Tree, amounting to a total of $149,915.

Dollar Tree shares are trading down 1.09% at $101.89 at the time of this writing on Friday morning.

About Dollar Tree

Dollar Tree operates discount stores across the United States and Canada, with over 8,800 shops under its namesake banner. About 50% of Dollar Tree's sales in fiscal 2024 were consumables (including food, health and beauty, and cleaning products), around 45% variety items (including toys and homewares), and 5% seasonal items. Dollar Tree sells most of its merchandise at the $1.25 price point and positions its stores in well-populated suburban markets. The retailer has agreed to sell Family Dollar (with about 7,000 stores) to private equity investors for $1 billion.

Key Indicators: Dollar Tree's Financial Health

Revenue Growth: Dollar Tree's remarkable performance in 3 months is evident. As of 30 April, 2025, the company achieved an impressive revenue growth rate of 11.29%. This signifies a substantial increase in the company's top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Consumer Staples sector.

Navigating Financial Profits:

• Gross Margin: The company excels with a remarkable gross margin of 35.62%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): With an EPS below industry norms, Dollar Tree exhibits below-average bottom-line performance with a current EPS of 1.61.

Debt Management: The company faces challenges in debt management with a debt-to-equity ratio higher than the industry average. With a ratio of 2.03, caution is advised due to increased financial risk.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: The P/E ratio of 20.32 is lower than the industry average, implying a discounted valuation for Dollar Tree's stock.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 1.23, Dollar Tree's stock is perceived as being overvalued in the market, particularly in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry benchmarks at 13.43, Dollar Tree presents an attractive value opportunity.

Market Capitalization: With restricted market capitalization, the company is positioned below industry averages. This reflects a smaller scale relative to peers.

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Unmasking the Significance of Insider Transactions

While insider transactions provide valuable information, they should be part of a broader analysis in making investment decisions.

Within the legal framework, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as per Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are mandated to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

Understanding Crucial Transaction Codes

In the domain of transactions, investors frequently turn their focus to those taking place in the open market, as meticulously outlined in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Dollar Tree's Insider Trades.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.