Friday, October 2, 2009

Investing in the old 5 & 10 store concept - now inflated to $1 dollar

This is a picture of Sines 5 & 10 cents store in downtown Quakertown, Pa. that was in our Pennsylvania magazine July/August issue. They are fine example of a long time retail concept of putting a whole fun store together of inexpensive items. Woolworth's and Ben Franklin stores are my personal favorites. So I thought in these hard times with 10% unemployment and no Olympics coming to Chicago, that I would see how these stores were doing from an investment standpoint.
The company doing the best with just tripling earnings is Dollar General Stores. 8300 stores.The only problem is they are owned by privately held KKR Kohlberg Kravis, & Roberts. You can purchase on the Euronext Amsterdam exchange, (symbol KKR) for $8.96 cents a share. That symbol represents a 30% interest in KKR and its whole porfolfio of 49 companies, so that is pretty diluted ownership of the "dollar store".
Over a three year period your best bet would have been to own Dollar Tree , (symbol DLTR). It has been up 47% over that period. This one would be the best long term investment for an IRA account. 99 Cents stores , (symbol NDN) , would have had you up 9.6% over the last 3 years. Family Dollar Stores , (symbol FDO), is down <-3.9%> over the last three years, but that was mostly because of a last quarter miss on earnings and downdraft of the stock. This investment may be the best from a value purchase standpoint, with decent earnings per share, ($2.02 in 2009/$2.26 in 2010 forecast) and pretty good growth , 12-13% projected sales growth. So if your not spending your $1.00 on a lottery ticket, go and buy something at your local 5 & 10 store . One worth a visit is the Jolly Trolley store, in sunny Dushore, PA. It is at the corner where the only stop light exist in Sullivan County, PA.

Happy shopping,


1 comment:

  1. Sam Walton started out managing a Ben Franklin 5 & 10 store in Arkansas, then he decided to go into business with his own store and compete against them, with less expensive prices. Thus began Wal-Mart.