A Small-Cap Retailer to Watch

Retailing is a very tough industry to invest in and one that I typically avoid. With the exception of ultra-luxury retailers that have unique attributes, retailers generally have a low barrier to entry. But consumers make purchases every day, and even in this economy, one segment of the retailing industry is experiencing strong growth in both sales and profitability.

Not surprisingly, I am talking about the ultra-discount retailers. Names such as Dollar General (DG) and Family Dollar (FDO), which offer basic everyday goods, often at $1 or less, are appealing to vast array of U.S. consumers. Shopping at these names has become a choice for higher-income Americans, not just financially strapped households. Over the past decade, Dollar General has seen its sales and profits soar while the ultimate low price giant, Wal-Mart (WMT), continues to struggle for consistent positive sales growth. Dollar General now has more stores than all of Wal-Mart combined....395 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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