Significant Reduction in Dollar General Holdings
On December 31, 2024, Capital International Investors (Trades, Portfolio) executed a notable reduction in its holdings of Dollar General Corp. The firm decreased its position by 5,420,221 shares, which represents a 36.57% decrease in its stake. This transaction was carried out at a price of $75.82 per share, impacting the firm's portfolio by -0.08%. Following this reduction, Capital International Investors (Trades, Portfolio) now holds 9,402,391 shares, accounting for 4.30% of its total holdings in Dollar General.
About Capital International Investors (Trades, Portfolio)
Capital International Investors (Trades, Portfolio) is a subsidiary of the Capital Research and Management Company, which is part of The Capital Group Companies. The firm is one of three equity divisions managing equity assets for the parent company, with a focus on rigorous fundamental research and risk management. Capital International Investors (Trades, Portfolio) manages an estimated market value of approximately $55 trillion. The firm follows the investing philosophies of its parent companies, creating portfolios from the bottom-up to find attractive investments and manage risks. Its largest investment holdings include Verizon Communications, Microsoft, Texas Instruments, ConocoPhillips, and Merck & Co.
Overview of Dollar General Corp
Dollar General Corp is a prominent retail chain with over 20,000 locations across the rural United States. The company serves as a convenient shopping destination, offering consumables, apparel, home products, and seasonal items. Dollar General is significantly undervalued, with a GF Value of $183.33 compared to its current price of $72.56. The company has a market capitalization of $15.96 billion and a PE ratio of 11.95, indicating a potential investment opportunity for value investors.
Financial Metrics and Valuation
Dollar General is rated significantly undervalued with a Price to GF Value ratio of 0.40. The company's profitability and growth ranks are strong, with a Profitability Rank of 9/10 and a Growth Rank of 9/10. However, the company faces challenges with a negative operating margin growth of -3.60% and an EBITDA growth of -3.20% over three years. The GF Score of 74/100 suggests likely average performance.
Performance and Growth Indicators
Despite its challenges, Dollar General's profitability and growth indicators remain robust. The company has a Financial Strength rank of 5/10 and an interest coverage of 7.00. The Altman Z score of 2.07 indicates moderate financial health. The company's Piotroski F-Score is 4, suggesting some financial stability concerns.
Other Gurus Holding Dollar General
Besides Capital International Investors (Trades, Portfolio), other notable investors in Dollar General include First Eagle Investment (Trades, Portfolio), Seth Klarman (Trades, Portfolio), and Tom Gayner (Trades, Portfolio). Pzena Investment Management LLC holds the largest share percentage among gurus in Dollar General, indicating continued interest from prominent investors in the retail chain.
Conclusion: Strategic Portfolio Adjustment
The reduction in Dollar General shares by Capital International Investors (Trades, Portfolio) reflects a strategic portfolio adjustment. Despite the reduction, Dollar General remains a significant holding, and its undervaluation presents potential opportunities for value investors. The transaction highlights the firm's ongoing commitment to managing risks and optimizing its investment portfolio.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
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