Stocks fell heavily this morning after a report on existing home sales renewed worries about the economy. The report shows that existing home sales fell 27% in July -- the lowest in 15 years. The market did regain some footing as it rose off it's lows later in the session, but still logged another declining day. The Dow fell 1.3% and closed at 10,040; the S&P closed down 1.45% at 1051 and the Nasdaq fell 1.6% to close at 2123.
It gets really hard to look at the market when all you see are losses everywhere. However, I'm a strong believer in keping a watch list so that if/when the market turns up, I'm ready with some potential purchases. So, in light of the woeful economic news today, I'm looking at Dollar Tree (DLTR). Jobless claims rose last week and home sales are not recovering in a way we'd like to see. The consumer is still under pressure and facing uncertainty. Stores like Dollar Tree provide some relief for cost-conscious consumers looking to ease the pressure on their wallets. They operate 3,800 discount variety stores in 48 states with a variety of merchandise priced at $1. Last week, they reported Q2 net income rose 37% on strong sales of food, health and beauty supplies. Revenue grew 13%. It rose as high as $46 today in big volume today, fell a bit, but still closed above yesterday's price at $44.35. I'd like to see this drift down a bit to the $41-$42 range before staking a claim. Long-term, I think this stock can go as high as $48-$50. Just my opinion -- what's yours?
Happy Trading!
Obligatory disclaimer: This blog is for information only. Past results do not guarantee future performance. All financial decisions involve risk and there are no guarantees. The suggestions above are for informational purposes only and the blogger is not liable for any losses incurred as a result of actual investment activity on the part of the reader.
Tuesday, August 24, 2010
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