3 Stocks at 52 Week Lows - $FIVE $DLTR $DG #FiveBelow

what's going on YouTube fam this is the wealth investing Network we do this for the win you're getting a sneak peek into my stock portfolio and a sneak peek into my research on stocks today is a video that I was not really exped to make I've got some ideas that are kind of all over the place I wanted to compare dollar store stocks really I started off me wanting to compare some stocks that are near their 52 we lows that's how this started it's changed as I've started crafting this video so you're going to really get a sneak peek into how I kind of do this please like subscribe all that stuff I was specifically looking at five and below because recently they had some bad news come out their stock took a dip let's take a look at their stock chart year-to date they're down over 60% honestly this company's been through a lot of ups and downs at the highs the stock price traded close to 2115 they actually hit near that at the beginning of the year in January 2024 now they're all the way down to $79 now this stock keeps hitting its head over and over again at this Price Right in terms of market cap that puts it at about $4 billion they actually have a PE ratio of about 14 which is lower than the stock market lower than the S&P 500 so I thought maybe there could be some value here their company that is typically known as a Dollar Store everything's below $5 but there's a section called Beyond now right everything's going up people are starting to expect okay dollar stores not everything's going to be a dollar at least not really in the United States even a store like Dollar General you know things aren't necessarily A Dollar Dollar Tree things used to be a dollar a Dollar Tree now they're like 125 oh there's a little $5 section over here so we know these prices are going up these companies get to blame inflation etc etc you look at Dollar Tree they're also down 25% year to dat if you've owned this stock for exactly 5 years you are up a whopping 1% I didn't say 10% I didn't say 100% I said 1% if you've owned Dollar General for The Last 5 Years you're down 11% so there's some roller coaster going on here there are some windows where you can catch it and maybe double your money but right now sentiment is down on these types of stocks so again I warned you this is going to be all over Place let's go back to Five and Below Five and Below CEO Joel Anderson resigns I believe it came as a surprise to the market the stock was already down when this happened this happened on what uh middle of July around July 17th you saw the stock go from already what was pretty much their 52e low and $100 and then go all the way down to 79 so obviously this is a surprise Chief Operating Officer or the COO stepped in okay that's pretty standard but then on top of that they had poor comparable sales growth um haven't performed into what analysts are expecting to perform at apparently their traffic is down um which I find interesting especially because of difference with five and below in companies like Dollar Tree who also owns Family Dollar so you think Dollar Tree Family Dollar Dollar General these are usually found in areas where people just need to buy the cheapest stuff right so if you're a dollar store you might even replace the grocery store right Five and Below is not like that five and below is a little different they don't even worry about groceries they're just kind of selling knickknacks the cheap version of back to school stuff um toys that kind of thing maybe you could say some of that stuff is going more online right um You could also say these stores at least in on the east coast in the midwest the cities I've been in you usually see five and belows closer to a target a Walmart and well maybe especially Walmart is more competitive on prices for a basketball or for back to school items things of that nature so maybe it's just poor strategy in terms of uh where they're putting their stores right the only positive outlook that came from their recent earnings report was that uh their net sales did rise about 11% uh During the 13-week period that ended May 24th very specific uh they're trying to make it look as good as possible there is my read on this but again I I think my read on this in general is that they're getting hurt by poor strategy that's not paying off that happened to Dollar Tree acquiring Family Dollar as well they're calling it a botched acquisition and I've been in a lot of Family Dollars they're terrible it's not a store I want to spend any amount of time in for real they also appear to have picked up uh some of the 99 Cent Stores uh they're going to reopen as Dollar Trees uh this could go either way I think a Rebrand is tough I'm not as familiar with the 99 Cent Stores so maybe it could be easy to switch them over but usually this requires a lot of capital and investment so that's where we're going to get into the financials in a little bit and then since I talked about the other two dollar general I'm not really going to go into a deep dive on Dollar General one thing that I found interesting though is just that of these stocks Dollar General uh is seen as less shareholder friendly investors would like to see them focus on share BuyBacks and it's always going to look tough when in the previous year management spends $2.7 billion on stock repurchases and then say okay we're going to stop doing that that's going to scare investors and make the stock go down and we've seen a sharp decline from Dollar General but again I was a little more interested in Five Below because when I started looking at the numbers I'm seeing this trending growth it's going up and to the right how it's supposed to now it's forecasted to not improve Revenue growth as it's been doing but you just look at the history they've only really had one period where they didn't produce Revenue growth and that was in the first to second quarter of 2020 this is the lowest their PE ratio has been in a decade and they are still profitable you look at certain companies there were periods where Dollar Tree wasn't profitable at all in Dollar General it's just kind of weird when you look at the stock price over time just the fact that it is broken Trend so hard um it's hard to even say it's going to continue on an an uptrend but we'll talk a little bit more about Trends in a second right now I want to talk about numbers so market cap $4 billion for five and below Dollar Tree and Dollar General are about five times as big with market caps above 20 billion for both so we look at their price to sales so for every dollar of Revenue that they get in what's the multiple that you're paying well less than one similar thing for Dollar Tree here price to sales ratio of 75 five and below a little above right so why is this trading higher my best guess right now just in my brief look at this is that they're balance balance sheets looking a little better they don't have a lot of cash on hand a little above $350 million but they only have about $1 1.8 billion in debt right these other companies do have more debt but that does make me less interested in Dollar General because management plans on opening 800 stores and doing a bunch of remodels and relocations but that means they probably have to take on more debt because they don't have a lot of cash on hand Dollar Tree also probably going to have to take on debt if they're going to revamp these 99 Cent Stores and this is a terrible time to be taking on a bunch of debt because interest rates are still high so again I warned you this is going to be all over the place let's go back to Five and Below I think five and below just has to perform essentially and it's going to be tough for them because again traffic is down you take a look at their stock chart you look at the 200 day moving average the 50-day moving average it's oversold but at the same time that doesn't really mean it's going to bounce back necessarily 5year chart still looking bad Max chart still looking bad there are so many levels that you would have to break back above because there are so many people that probably want to sell this stock if you bought this stock at $100 at $150 you probably want to sell as soon as it hits there so something really would have to drive momentum like crazy for you to see a really good return on this Dollar General also broken Trend in a pretty bad way not something I'm looking to get into from a five-year perspective Dollar Tree is broken Trend but from their Max chart I mean they're actually not looking that bad in terms of uh the trend and the trend is your friend I just think that they would have to really execute on uh these 99 cent store revamps so again coming into this I was a little more interested in five and below I thought that maybe um there was some value happening um in terms of their PE ratio being lower than it's been in over a decade I thought maybe they could actually charge some of the highest prices with their five Beyond section and uh do really well during kind of the back to school time but from a stock chart perspective from a perspective of uncertainty with their CEO from poor comparable sales growth so from the way I typically look at stocks Five Below should not be a stock that I'm interested in at all really usually to end these videos I tell you a secret today's secret is that I'm putting Five Below on my watch list even though I continually call it five and below Five Below Five and Below whatever it's going on my watch list it shouldn't I'm just so interested because from a store experience I prefer going in Five Below however there's just so much uncertainty going on with it I think the market is scared and possibly overreacting and that's when I made some of the best investments made some of the best money in the stock market I'm just going to put it on my watch list not pull the trigger on anything maybe come back to it in a couple months so yeah that's that's my secret hope you enjoyed the video please like subscribe all those things thank you so so much for watching see you the next one peace