Dollar General

It's not often you see a company report an earnings, revenue and guidance miss on Wall Street and its shares initially trade higher. However, that's exactly what happened with Walmart (NYSE: WMT) stock this week.Source: Ken Wolter / Shutterstock.com Walmart wasn't immune to a difficult holiday season, but Walmart stock was. Investors seem to realize Walmart is one of the few companies in the retail sector that can actually thrive in the Amazon.com (NASDAQ: AMZN) era. The NumbersThe first takeaway from Walmart's quarter is that the company didn't live up to high expectations. The retail giant reported earnings per share of $1.38 on revenue of $141.67 billion in the fourth quarter, missing analyst expectations of $1.43 and $142.49 billion, respectively. U.S. same-store sales growth was 1.9%, short of Wall Street's 2.3% consensus estimate. Walmart also reported 35% online sales growth.InvestorPlace - Stock Market News, Stock Advice & Trading TipsLooking ahead to fiscal 2021, Walmart guided for EPS of between $5 and $5.15, short of analyst estimates of $5.22. Walmart also guided for 30% online sales growth this year. Walmart told investors it will likely take a hit from the coronavirus outbreak in the first quarter. However, it said the impact is difficult to quantify at this point and is not included in its guidance. * 7 Failing Tech Stocks to Disconnect From Now Yes, the fourth quarter numbers and guidance weren't as good as many investors of Walmart stock had hoped. Yes, the coronavirus will likely weigh on the first quarter. But given those negatives, Walmart's quarter was relatively good compared to the rest of the retail sector.Same-store sales growth was positive. Net income was up 12.1%. Despite heavy investments in store remodels, delivery services and online sales, gross margins in 2019 were 24.1%, down only slightly from 24.5% in 2018. The Bigger Picture for Walmart StockThe reason why investors didn't flinch following the poor fourth quarter is likely because nothing changed the long-term narrative for Walmart stock. Walmart is not the typical stock in the typical market sector. Retailers that can't keep up with Amazon have been dropping like flies for years. Walmart and others have had to scramble and invest heavily and aggressively to keep up. Those aggressive investments have eaten into profits.But because not every retail competitor out there is willing or financially able to update to an online/omnichannel model, the competition in the physical retail space is actually shrinking. Some retailers are filing for bankruptcy and disappearing all together. Many are trying to downsize their way out of their problems by closing more and more stores.Either way, any company that is growing its footprint in today's market is gaining market share, at least in the brick-and-mortar space. The total number of Walmart stores grew from 7,909 in 2009 to 11,766 in 2019. Walmart's growth has certainly slowed, but as its physical retail competitors are dying, Walmart is scooping up their customers. Discount StandoutsAmazon has been bleeding the retail sector dry, but certain pockets of the sector are relatively protected. One of the most protected parts of the sector is the discount retail group. Dollar stores have thrived in recent years. In fact, Dollar General (NYSE: DG) stock has more than doubled the return of the overall S&P 500 in the past five years.Bank of America analyst Robert Ohmes says American consumers are much more focused on prices today than in previous economic booms. In addition, low-income shoppers are increasing their spending more than higher-income shoppers.Ohmes says this trend is the core of his "Discount Store Decade" thesis. He says discount retailers like Walmart, Target (NYSE: TGT), Dollar General and others have a decade of outperformance ahead. Ohmes states:In our view, TGT, WMT, COST & DG should benefit the most from continued 'Discount Store Decade' (DSD) tailwinds, including favorable demographics, strong new home sales, competitor store closings, omni-channel success, alternative & digital profit streams, and a still strengthening low-to-middle income consumer that supports potential trade-up & basket inflation in the value retail channel (particularly in the Southeast & West).In other words, while overall retail sales are shifting from offline to online, consumer spending is also shifting from high-end to low-end. And Walmart is top dog among brick-and-mortar discount retailers. How to Play ItHoliday sales, coronaviruses, trade wars and recessions are all problems that short-term traders must lose sleep over. For long-term investors, Walmart stock is a top play on discount retail that trades at a very reasonable 22.9 forward earnings multiple. Thirty years ago, the best advice for Walmart stock investors was probably to buy it and forget about it. In 2020, I think that advice is as good as ever.Wayne Duggan has been a U.S. News & World Report Investing contributor since 2016 and is a staff writer at Benzinga, where he has written more than 7,000 articles. Mr. Duggan is the author of the book "Beating Wall Street With Common Sense," which focuses on investing psychology and practical strategies to outperform the stock market. As of this writing, Wayne Duggan does not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Failing Tech Stocks to Disconnect From Now * 5 Ideal Dividend Stocks for New Investors * 4 Stocks to Buy No Matter Who Wins the 2020 Election The post How To Play Walmart Stock Following Earnings appeared first on InvestorPlace. […]

The retail sector has been a minefield for investors in the past several years as traditional brick-and-mortar companies attempt to fend off online competition from Amazon.com, Inc. (NASDAQ: AMZN ) and ... […]

Dollar General Corporation (NYSE: DG) today announced that it plans to release its financial results for the fiscal 2019 fourth quarter and full year ended January 31, 2020, on March 12, 2020. […]

The Relative Strength (RS) Rating for Dollar General jumped into a new percentile Wednesday, with an increase from 79 to 82. When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength. […]

In several recent sessions of Big Stock Charts, we've focused on names with sideways trading largely for two reasons.Source: Shutterstock First, stock charts heading generally sideways sometimes -- but not always -- can be easier to read. When a stock goes parabolic like Tesla (NASDAQ:TSLA) has of late, or plunges to multi-year lows, there often aren't the same key levels on which to focus technical analysis.Second, in this market, sideways stocks simply are more interesting. Particularly in recent years, this bull market has seen winners keep winning and laggards keep lagging. There have been exceptions: Tesla stock has recovered from a huge plunge just last year, cannabis stocks collapsed after huge gains, and companies like Target (NYSE:TGT) have managed to reinvent themselves. From a broad standpoint, however, investors have been best served following the old advice of letting their winners run and quickly cutting their losers loose.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Exciting Stocks to Buy for Aggressive Investors Friday's big stock charts feature three more names that have traded sideways, including one that has done so in an almost bizarre fashion. All three names have hopes to join the broader rally and, at least according to the charts, all three have at least a decent chance of doing so. Dollar General (DG)Source: Provided by Finviz When we highlighted Dollar General (NYSE:DG) as one of our big stock charts back on Dec. 3, DG stock seemed to be in a precarious position. Ahead of an important earnings report, the stock had dipped modestly below support. But buyers stepped in, and two months later, the first of Friday's big stock charts looks more positive: * DG stock has seen a bit of a bounce in the last four sessions, gaining over 3%. That's moved the stock away from support and led it to exit both a descending triangle and a wedge pattern. Those exits suggest a breakout could be at hand, particularly if DG can rally past January highs of $160. Gains Thursday on a red day for broad market indices add to the sense that this rally should have legs. * Fundamentally, the case does get a bit dicier. DG stock trades at 24x the consensus fiscal 2020 earnings per share estimate. That's a big multiple by retail standards and higher than those assigned both Target and Walmart (NYSE:WMT). With Walmart stock actually negative so far in 2020, and earnings due on Wednesday, there seems a chance investors could rotate out of DG and into WMT before or after that release. * Still, this is a stock I've long thought was attractive from a long-term standpoint. And with the combination of a defensive business model and solid earnings growth, investors are likely to agree. Investors have been willing to pay similar, or higher, multiples for other quality businesses, and I believe they'll do the same with Dollar General. If that's the case, the strength of late should continue, with new highs on the way in 2020. IPG Photonics (IPGP)Source: Provided by Finviz Not that long ago, IPG Photonics (NASDAQ:IPGP) was one of those growth stocks investors were wise to hold onto no matter the valuation. IPGP stock tripled between November 2016 and late 2017.IPG would buck the broader trend, however: shares promptly lost half their value in a matter of months during 2018, and since an early 2019 rally they've stalled out. But after fourth quarter earnings this week, the second of our big stock charts suggests a bounce might be in store: * IPGP stock, if narrowly, has exited both a wedge and a descending triangle. And buyers flooded in after fourth quarter earnings on Thursday: shares were down nearly 10% in early trading but closed up 2%. That trading, on high volume, suggests strength going forward. It could be enough to breach support that has held repeatedly at or just above $150. * Even off 2018 highs, IPGP stock looks reasonably expensive, at 31x 2020 EPS estimates. That's particularly true relative to recent performance: revenue actually declined 10% in 2019, and the Street sees less than 2% top-line growth in 2020. But China is a key market, and long-term opportunities for the laser manufacturer in lasers and electric vehicle batteries suggest performance should improve at some point. * The reaction on Thursday suggests that investors are willing to look past short-term worries. That's undoubtedly a good thing for IPGP stock. If the market stays patient, the chart suggests IPGP should have more upside ahead. American Eagle Outfitters (AEO)The third of Friday's big stock charts takes sideways trading to a whole new level. American Eagle Outfitters (NYSE:AEO) stock incredibly has closed with a $14 handle for 44 consecutive sessions. There are stocks with announced takeover offers that show more volatility.That trading obviously suggests rather firm resistance at $15. But there's also a consolidating base, and some reason to see a reversal before, or after, fourth quarter earnings next month: * The steady sideways trading does set AEO stock up for a reversal out of a descending narrowing wedge. While resistance is firm, support clearly is as well. Obviously, Q4 earnings will be the deciding factor here, but AEO should be able to at least challenge the 200-day moving average at $16 with a beat next month. * Fundamentally, American Eagle stock looks awfully cheap, at almost exactly 10x EPS estimates for this year. Estimates for fiscal 2020 (ending January 2021), however, highlight the potential bull/bear divide here. The high Street figure is at $1.63, implying double-digit growth. The low estimate of $1.23 would represent a 16% decline. Trading over the past two months suggests that the market as a whole is waiting for more information in terms of making its own decision -- which Q4 results and commentary can provide. * And so there's at least a path for AEO stock to rally which should make the stock attractive to retail bulls. The company's aerie segment continues to outperform L Brands (NYSE:LB) unit Victoria's Secret. The balance sheet is solid, with about $1.60 per share in cash and no debt. Same-store sales remain positive. AEO, as seen on the monthly chart, has posted nice rallies in the past. At some point, this stock is going to move, and a big Q4 report would mean it would move in the right direction.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Exciting Stocks to Buy for Aggressive Investors * 20 Stocks to Buy From the Law of Accelerating Returns * 7 U.S. Stocks to Buy on Coronavirus Weakness The post 3 Big Stock Charts for Friday: Dollar General, IPG Photonics, and American Eagle appeared first on InvestorPlace. […]