Stocks to invest in – Signet Jewelers, Dollar General: Analysts Eviscerated These 5 Companies This Week



Stocks to invest in

There’s a lot of analyst noise out there, what with dozens of analysts covering any particular stock. Add to that the fact that many analyst updates only amount to minor target price updates or even just reiterations of their previous ratings, and it can be difficult to pinpoint the most relevant calls made by analysts.

In this article, we’ll wade through all of the noise to bring you five stocks that took it on the chin from analysts this week, either through a flurry of negative updates, or because of one particularly vicious one. Read on to see what analysts had to say about Dollar General Corp. (NYSE:DG), Signet Jewelers Ltd. (NYSE:SIG), Dollar Tree, Inc. (NASDAQ:DLTR), Express, Inc. (NYSE:EXPR), and BOK Financial Corporation (NASDAQ:BOKF) during the past week.

Through extensive research that covered the portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

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Analysts Pile On Dollar General Corp. (NYSE:DG)


Analysts had a field day on Dollar General Corp. (NYSE:DG) following the announcement of its fiscal second quarter results on August 25. No less than eight different analysts either downgraded the stock, lowered their price target on it, or in many cases, did both. Among them were Credit Suisse, which downgraded the stock to ‘Neutral’ from ‘Outperform’ and slashed its price target on it to $80 from $95, and Deutsche Bank, which maintained a ‘Hold’ rating on it and cut its price target to $84 from $99. A lone bullish call came from Royal Bank of Canada (those Canadians are just too darn nice), which maintained an ‘Outperform’ rating on Dollar General and raised its price target on it to $103 from $90.

For the fiscal quarter ended July 29, Dollar General pulled in $5.39 billion in revenue and earned $1.08 per share, which missed estimates of $5.50 billion and $1.09 respectively. Dollar General shares crumbled by 16.9% this week in the face of its results and the litany of bearish calls. The discount retailer was in the portfolios of 53 of the 749 hedge funds in our database which filed 13F’s for the June 30 reporting period.

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Rival Discount Retailer Dollar Tree, Inc. (NASDAQ:DLTR) Also Gets Ripped

Dollar Tree, Inc. (NASDAQ:DLTR) didn’t have the same flurry of analyst activity as its rival, but it did get ripped by MKM Partners after the release of its own quarterly financial results, with that firm downgrading it to ‘Neutral’ from ‘Buy’ and lowering its target price on the stock to $80 from $140. As MKM wrote in an analyst note, Dollar Tree’s sequential same-store sales growth of 1.2% was the weakest it has been since the fourth quarter of 2013, which should put pressure on a stock that has enjoyed one of the highest valuation multiples in its industry. Dollar Tree hit a 52-week high in mid-July and had been largely flat since then, until its 10.5% tumble this week.

Dollar Tree had sales of $5 billion in the second quarter, missing estimates by $90 million, and lowered its full-year sales forecast to a range of $20.69 billion-to-$20.87 billion from the previous guidance range of $20.79 billion-to-$21.08 billion. Both discount retailers were partially impacted by a reduction in food stamps coverage in some states. Charles Akre’s Akre Capital owned 4.19 million shares of Dollar Tree on June 30.

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On the second page of this article, we’ll run through three other stocks that endured bearish analyst calls this week.

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