CONSUMER
DISCRETIONARY
STOCK PITCH
4/2/2013
The Ohio State University SIM Portfolio
Nolan Cox
Shengyu Cao
Trey Morrish
Ziyang Zhong
Overview
Key Takeaways
• S&P 500 11.74%
• SIM 12.28%
• SIM Overweight by .54%
• SIM inclusion of cash and dividends
Consumer Discretionary
Recommendation: Underweight
Positives
Negatives
• Revenue continually
• Quantitative Easing
increasing
• Stable EPS Growth
• De-levering of consumer debt
• Volatile Sector
• All-Time Highs in Indices
Recommendation: Underweight
• 50 basis points below S&P 500 distribution
• 11.2%
• Sectors we like
• Media
• General Merchandise
STOCKS TO DROP
Michael Kors: Business
• Apparel & Accessary
• A global luxury lifestyle brand
• 3 Major Segments:
• retail (48.14%)
• wholesale (46.85%)
• licensing (5%)
• Current Price: $56.79
Michael Kors: Holding
• Current Weight: 2.3%
• Desired Weight: 0%
• Target Price: $53.35
• DCF Value: $53.99
• Multiples Value: $51.87
Valuation-Multiples
Michael Kors
Catalyst
• Quick Expansion
Risk
• impairment of brand
image
• limited operating
experience
• restrictive covenants in
their credit agreement
Target: Business
• General Merchandise
• 2 Major Segments:
• Retail Sales (98% of Revenue)
• Credit Cards (2% of Revenue)
• Expansion in Canada
• Current Price: $69.46
Target: Holding
• Current Weight: 2.72%
• Desired Weight: 0%
• Target Price: $64.37
-- DCF value: $ 61.98
-- Multiples value: $ 65.96
Target: DCF
Target TGT
Analyst: Shengyu Cao
Date: 2013/2/19
Year
2012E
Revenue
71,371
% Grow th
Terminal Discount Rate =
Terminal FCF Growth =
2013E
73,274
2.7%
Operating Income
5,484
Operating Margin
Interest and Other
5,835
78,626
4.0%
6,133
82,558
5.0%
6,440
2017E
86,686
5.0%
6,761
2018E
90,586
4.5%
7,066
2019E
94,663
4.5%
7,384
2020E
98,923
4.5%
7,716
2021E
103,374
4.5%
8,063
TERMINAL
2022E
107,509
4.0%
8,386
7.7%
7.8%
7.8%
7.8%
7.8%
7.8%
7.8%
7.8%
7.8%
(842)
(872)
(907)
(944)
(991)
(1,040)
(1,087)
(1,136)
(1,187)
(1,240)
(1,290)
-1.2%
-1.2%
-1.2%
-1.2%
-1.2%
-1.2%
-1.2%
-1.2%
-1.2%
-1.2%
36.7%
Net Income
3.2%
2016E
7.6%
1,704
Tax Rate
75,602
2015E
7.7%
Interest % of Sales
Taxes
5,599
2014E
10.00%
4.0%
2,938
% Grow th
1,735
36.7%
2,992
1,808
36.7%
3,119
1,904
36.7%
3,285
2,000
36.7%
3,449
2,100
36.7%
3,622
2,194
36.7%
3,785
2,293
36.7%
3,955
2,396
36.7%
4,133
2,504
36.7%
4,319
2,604
36.7%
4,492
1.8%
4.3%
5.3%
5.0%
5.0%
4.5%
4.5%
4.5%
4.5%
4.0%
2,141
2,235
2,344
2,595
2,890
3,207
3,805
4,449
5,144
5,892
6,730
3.00%
3.05%
3.10%
3.30%
3.50%
3.70%
4.20%
4.70%
5.20%
5.70%
6.26%
-400
-353
-397
-315
-413
-433
-408
-426
-445
-465
-430
-0.6%
-0.5%
-0.5%
-0.4%
-0.5%
-0.5%
-0.5%
-0.5%
-0.5%
-0.5%
-0.4%
Subtract Cap Ex
4,482
4,616
4,778
4,922
5,168
5,427
5,671
5,926
6,193
6,471
6,730
Capex % of sales
6.28%
6.30%
6.32%
6.3%
6.3%
6.3%
6.3%
6.3%
6.3%
6.3%
6.3%
Free Cash Flow
1,003
1,061
1,120
1,419
1,548
1,748
2,179
2,611
3,078
3,581
4,187
5.8%
5.6%
26.7%
9.1%
12.9%
24.6%
19.8%
17.9%
16.4%
16.9%
Add Depreciation/Amort
% of Sales
Plus/(minus) Changes WC
% of Sales
% Grow th
NPV of Cash Flows
NPV of terminal value
Projected Equity Value
Free Cash Flow Yield
12,238
27,984
40,221
2.22%
Current P/E
Projected P/E
Current EV/EBITDA
Projected EV/EBITDA
15.3
13.7
7.6
7.0
Shares Outstanding
Current Price
Implied equity value/share
Upside/(Downside) to DCF
649
$
$
69.46
61.98
-10.8%
30%
70%
100%
Terminal Value
Free Cash Yield
15.1
13.4
7.4
6.8
14.5
12.9
7.1
6.5
72,583
5.77%
Terminal P/E
16.16
Terminal EV/EBITDA
5.7
Target: Multiples
Target E, S,
B,
Target Price
etc/Share
Absolute
Valuation
High
Low
Median
Current
Target
Multiple
P/Forward E
21.5
11.2
14.9
13.8
14.2
4.53
64.326
P/S
1.1
0.3
0.7
0.6
0.6
110.42
66.252
P/B
4.3
1.6
2.8
2.3
2.4
27.15
65.16
P/EBITDA
10.85
3.56
6.41
5.46
6.1
11.55
70.455
P/CF
16.7
5.5
9.9
7.9
8
7.95
63.6
Target Price
65.96
Target
Catalyst
Risk
• Canada Expansion
• Price competition – Price
• Recovering economy and
matching policy
• Online shopping
disposable income
• Growth of credit card
business
STOCKS TO HOLD OR
REBALANCE
Starbucks: Business
• The premier roaster and retailer of specialty coffee in the
world.
• 1 Major Segment:
• Company Operated Retail
• 2 Minor Segments:
• Specialty Operations
• Licensing
Starbucks: Holding
• Current Weight: 1.48%
• Desired Weight: 1.5%
• Target Price: $61.56
• Current Price: $56.89
• Upside: 8.2%
Starbucks DCF
Multiples Valuation
Absolute
Target
Valuation High
Low
Median Current Multiple E,S,B
P/Forward E
44.1
13
17.5
17.3
24
3.29
P/S
1.2
0.4
0.9
1.2
1
47.41
P/B
3.7
1.5
2.5
3.7
3.5
15.38
P/EBITDA
7.63
3.24
6.31
7.63
7.7
7.46
P/CF
11.4
5.7
9.1
11.4
11.5
4.99
Price: $60.74
Starbucks
Catalyst
Risk
• Strong American
• Weak performance in
Segments
• China & Japan
• K-Cup Sales
Middle East, Africa and
Europe
• Teavana-Asia
Ford: Business
• One of the world’s largest producers of cars and trucks.
Ford and it’s subsidiaries also engage in other
businesses, including financing vehicles.
• 1 Major Segment:
• Automotive manufacturer
• 1 Minor Segment:
• Financial Services
Ford: Holding
• Current Weight: 3.00%
• Desired Weight: 2.5%
• Target Price: $14.84
• DCF: $14.84
• Multiples: $14.74
• Current Price: $13.00
• Upside: 14.1%
Ford DCF
Ford (F)
Analyst: Nolan Cox
Date: 2/18/2012
Year
2012E
Revenue
132,398
% Grow th
11,338
Operating Margin
Interest and Other
Interest % of Sales
Taxes
140,341
Subtract Cap Ex
14,649
169,273
4.0%
15,235
175,705
3.8%
15,813
182,030
3.6%
16,383
188,219
3.4%
16,940
2021E
194,242
3.2%
17,482
TERMINAL
2022E
200,070
3.0%
18,006
9.0%
9.0%
9.0%
9.0%
(6,926)
(8,133)
(9,112)
(4,209)
(4,395)
(4,570)
(4,744)
(4,915)
(5,082)
(5,245)
(5,402)
-5.2%
-5.8%
-6.1%
-2.7%
-2.7%
-2.7%
-2.7%
-2.7%
-2.7%
-2.7%
-2.7%
1,102
25.1%
3,294
6,191
1,129
25.1%
3,373
2.4%
6,811
2,455
25.0%
7,366
118.4%
6,236
2,564
25.0%
7,691
4.4%
6,510
2,666
25.0%
7,998
4.0%
6,771
2,767
25.0%
8,302
3.8%
7,028
2,867
25.0%
8,601
3.6%
7,281
2,964
25.0%
8,893
3.4%
7,529
3,059
25.0%
9,178
3.2%
7,770
3,151
25.0%
9,453
3.0%
8,003
4.1%
4.4%
4.6%
4.0%
4.0%
4.0%
4.0%
4.0%
4.0%
4.0%
4.0%
(6,492)
(6,006)
(6,366)
(5,612)
(5,371)
(5,078)
(5,008)
(4,915)
(4,800)
(4,662)
(4,502)
-4.9%
-4.3%
-4.3%
-3.6%
-3.3%
-3.0%
-2.9%
-2.7%
-2.6%
-2.4%
-2.3%
5,164
3.9%
Free Cash Flow
585
% Grow th
$
$
4.4%
2020E
9.0%
Capex % of sales
Shares Outstanding
14,031
162,762
2019E
9.0%
5,384
% of Sales
4.8%
2018E
9.0%
-0.4%
% of Sales
13,613
155,902
2017E
9.0%
3,306
Plus/(minus) Changes WC
6.0%
2016E
9.2%
% Grow th
Add Depreciation/Amort
148,762
2015E
8.9%
25.1%
Net Income
12,529
2014E
11.0%
3.0%
8.6%
1,106
Tax Rate
Debt
Cash
Cash/share
Total Assets
Debt/Assets
Working Capital % of Grow th
2013E
6.0%
Operating Income
Current Price
Implied equity value/share
Upside/(Dow nside) to DCF
Terminal Discount Rate =
Terminal FCF Grow th =
5,614
5,950
6,236
4.0%
4.0%
4.0%
939
984
4,931
60.4%
4.8%
401.2%
6,510
4.0%
5,360
8.7%
6,771
4.0%
5,795
8.1%
7,028
4.0%
6,129
5.8%
7,281
4.0%
6,469
5.5%
7,529
4.0%
6,811
5.3%
7,770
4.0%
7,155
5.1%
8,003
4.0%
7,500
4.8%
4,112
Terminal Value
96,566
13.00
14.84
14.1%
Free Cash Yield
Terminal P/E
10.2
100,970
24,100
5.86
178,348
56.6%
-75%
Terminal EV/EBITDA
6.7
7.77%
Ford Multiples
Absolute Valuation
A.
P/Forward E
High Low Median
B.
C.
Current
D.
E.
Target Multiple
F.
25.1
5.6
8.3
9.4
9
P/S
0.4
0
0.1
0.4
0.2
P/B
24.3
0.9
2.3
2.7
2.3
P/EBITDA
7.84 0.37
1.62
3.5
2.5
1.4
4.6
2
P/CF
5.4
0.3
Target Price $14.74
Ford
Catalyst
Risk
• Chinese Expansion
• European Losses and
• Record Highs in February
future EU risk
• Ceiling effect of all time
highs.
• Weak Sector compared to
others.
• Strong American
Automotive Recovery
DirecTV: Business
• Digital entertainment
• 2 Major Segments:
• DirecTV US (78%)
• DirecTV Latin America (21%)
• Small regional sports network
• Current Price: $56.59
• 52 Week: $42.87 - $57.64
DirecTV: Holding
• Current Weight: 2.8%
• Desired Weight: 3.5%
• Target Price: $66
• DCF Value: $65
• Multiples Value: $67
• Upside: 16.3%
DirecTV: DCF
Analyst: Trey Morrish
Date: 2/14/2013
Year
Revenue
2013E
32,076
% Growth
Operating Income
Operating Margin
Terminal Discount Rate =
Terminal FCF Growth =
2014E
35,308
10.1%
5,400
5,609
2015E
37,753
6.9%
5,858
2016E
40,774
8.0%
6,116
2017E
43,628
7.0%
6,544
10.00%
2.5%
2018E
46,682
7.0%
7,002
2019E
49,483
6.0%
6,928
2020E
51,957
5.0%
7,274
2021E
54,035
4.0%
7,565
TERMINAL
2022E
2023E
55,656
3.0%
7,235
57,047
2.5%
7,416
16.8%
15.9%
15.5%
15.0%
15.0%
15.0%
14.0%
14.0%
14.0%
13.0%
13.0%
Interest and Other
(710)
(764)
(798)
(862)
(922)
(987)
(1,046)
(1,098)
(1,142)
(1,176)
(1,206)
Interest % of Sales
-2.2%
-2.2%
-2.1%
-2.1%
-2.1%
-2.1%
-2.1%
-2.1%
-2.1%
-2.1%
-2.1%
Taxes
Tax Rate
Non-controlling Interest
Percent of Sales
Net Income
1,631
33.0%
% of Sales
Plus/(minus) Changes WC
% of Sales
Subtract Cap Ex
Capex % of sales
Free Cash Flow
1,771
35.0%
1,839
35.0%
1,968
35.0%
2,105
35.0%
2,059
35.0%
2,162
35.0%
2,248
35.0%
2,121
35.0%
2,174
35.0%
30
33
36
38
41
44
47
49
51
52
54
0.1%
0.1%
0.1%
0.1%
0.1%
0.1%
0.1%
0.1%
0.1%
0.1%
2,869
3,116
8.6%
2,726
3,089
3,254
4.4%
3,398
3,377
3.8%
3,670
3,613
7.0%
4,145
3,866
7.0%
4,435
3,777
-2.3%
4,701
3,965
5.0%
5,196
4,124
4.0%
5,403
3,886
-5.8%
5,566
3,983
2.5%
5,705
8.5%
8.8%
9.0%
9.0%
9.5%
9.5%
9.5%
10.0%
10.0%
10.0%
(3,450)
(195)
(148)
(182)
(170)
(182)
(166)
(145)
(120)
(93)
(80)
-10.8%
-0.6%
-0.4%
-0.4%
-0.4%
-0.4%
-0.3%
-0.3%
-0.2%
-0.2%
-0.1%
3,776
11.8%
2,128
% Growth
Current Price
Implied equity value/share
Upside/(Downside) to DCF
36.0%
0.1%
% Growth
Add Depreciation/Amort
1,696
4,156
11.8%
2,908
36.6%
$ 57.31
$ 65.83
14.9%
4,444
11.8%
3,057
5.1%
4,485
11.0%
3,213
5.1%
4,581
10.5%
3,513
9.4%
4,902
10.5%
3,759
7.0%
5,196
10.5%
3,668
-2.4%
5,196
10.0%
3,942
7.5%
5,403
10.0%
4,104
4.1%
5,566
10.0%
3,871
10.0%
5,705
10.0%
3,970
-5.7%
2.6%
Terminal Value
Free Cash Yield
Terminal P/E
Terminal EV/EBITDA
54,257
7.32%
13.6
5.3
DirecTV: Multiples
High
Low
Median
Current
Target Multiple
P/Forward E
152.2
9.5
16.3
10.5
13
P/S
2.6
1.1
1.7
1.1
1.25
P/B
55.5
2.2
4.2
N/A
N/A
P/EBITDA
24.01
4.05
6.85
4.05
7
P/CF
26
5.7
9.4
6.4
8.5
Target Value: $67
DirecTV
Catalyst
Risk
• LA Growth
• Loss of NFL Sunday
• Increase in US margins
Ticket Monopoly
• Currency devaluations
as programming costs
increase
• Sustainable high ARPU
and constant churn
NEW HOLDINGS
Comcast: Business
• Cable and Broadband provider across US
• 2 Major Segments:
• Cable Broadcasting (TV/Phone/Internet)
• NBC Universal (Programming, Theme Parks, Film)
• Current Price: $41.98
• 52 Week: $28.09 - $42.01
Comcast: Overview
2012
CMCSA
DTV
DISH
TWC
Comcast
2013 (Proj)
EPS
$2.28
$4.58
$1.41
$6.9
$2.61*
Sales
$62.57 B
29.74
$14.27 B
$21.39 B
$67 B*
Return on
Equity
12.06%
N/A
N/A
29.14%
N/A
Profit
Margin
9.91%
9.91%
4.46%
10.09%
10.19%
*EPS is 5% above consensus,
Revenue 4% above consensus
Comcast: Holding
• Current Weight: 0.0%
• Desired Weight: 1.5%
• Current Price: $42
• Target Price: $50.50
• DCF Value: $50
• Multiples Value: $51
• Upside: 13.1 %
Comcast: DCF
Analyst: Trey Morrish
Date: 3/29/2013
Year
Revenue
2013E
67,335
% Growth
Operating Income
Operating Margin
Interest and Other
Interest % of Sales
Taxes
Tax Rate
Non-controlling Interest
Percent of Sales
Net Income
% of Sales
Plus/(minus) Changes WC
% of Sales
Subtract Cap Ex
Capex % of sales
Free Cash Flow
15,318
73,136
17,030
2015E
79,649
8.9%
18,830
2016E
87,614
10.0%
20,151
2017E
95,499
9.0%
21,965
10.00%
4.0%
2018E
103,139
8.0%
23,722
2019E
110,359
7.0%
24,279
2020E
116,981
6.0%
25,736
2021E
122,830
5.0%
27,023
TERMINAL
2022E
2023E
127,743
4.0%
26,826
132,853
4.0%
27,899
22.7%
23.3%
23.6%
23.0%
23.0%
23.0%
22.0%
22.0%
22.0%
21.0%
21.0%
(2,491)
(2,852)
(3,266)
(3,592)
(3,915)
(4,229)
(4,525)
(4,796)
(5,036)
(5,237)
(5,447)
-3.7%
-3.9%
-4.1%
-4.1%
-4.1%
-4.1%
-4.1%
-4.1%
-4.1%
-4.1%
-4.1%
4,617
36.0%
1,347
2.7%
6,862
5,193
37.0%
1,463
2.0%
7,380
7.5%
10,100
10,239
5,856
38.0%
1,593
2.0%
7,961
7.9%
10,354
6,292
38.0%
1,752
2.0%
8,514
6.9%
7,885
6,859
38.0%
1,910
2.0%
9,281
9.0%
9,072
7,407
38.0%
2,063
2.0%
10,023
8.0%
9,798
7,507
38.0%
2,207
2.0%
10,040
0.2%
10,484
7,957
38.0%
2,340
2.0%
10,643
6.0%
11,698
8,355
38.0%
2,457
2.0%
11,175
5.0%
12,283
8,204
38.0%
2,555
2.0%
10,830
-3.1%
12,774
8,532
38.0%
2,657
2.0%
11,263
4.0%
13,285
15.0%
14.0%
13.0%
9.0%
9.5%
9.5%
9.5%
10.0%
10.0%
10.0%
(140)
(29)
(33)
(124)
(121)
(116)
(109)
(99)
(87)
(72)
(75)
-0.2%
0.0%
0.0%
-0.1%
-0.1%
-0.1%
-0.1%
-0.1%
-0.1%
-0.1%
-0.1%
7,407
11.0%
8,828
% Growth
Current Price
Implied equity value/share
Upside/(Downside) to DCF
2014E
8.6%
% Growth
Add Depreciation/Amort
Terminal Discount Rate =
Terminal FCF Growth =
8,776
12.0%
8,484
-3.9%
$ 41.98
$ 50.08
19.3%
10,354
13.0%
7,936
-6.5%
9,638
11.0%
7,070
-10.9%
10,027
10.5%
8,452
19.5%
10,830
10.5%
9,139
8.1%
11,588
10.5%
9,107
-0.4%
11,698
10.0%
10,567
16.0%
12,283
10.0%
11,108
5.1%
12,774
10.0%
10,775
-3.0%
10.0%
13,285
10.0%
11,205
4.0%
Terminal Value 194,228
Free Cash Yield
5.77%
Terminal P/E
17.2
Terminal EV/EBITDA
5.3
Comcast: Multiples
High
Low
Median
Current
Target Multiple
P/Forward E
24.1
11.7
15.3
17.6
20
P/S
2.2
1.2
1.5
1.8
2
P/B
2.3
0.9
1.4
2.3
3
P/EBITDA
5.35
2.72
3.85
3.97
4.5
P/CF
8.1
3.5
5
5
7
Target Value: $51
Comcast
Catalyst
Risk
• Scaling – Removal of all
• Competition (DTV, DISH,
NBC programming costs
• Increased Subscribers
• NBC raises prices, keeps
retention
TWC, COX)
• Programming costs
excluding NBC
• Regulation of NBC
Dollar General: Business
• General Merchandise
• Discount retail
• Most retail locations in US
• Current Price: $50.58
Dollar General: Holding
• Current Weight: 0%
• Desired Weight: 2.2%
• Target Price: $56.69
-- DCF value: $ 55.9
-- Multiples value: $ 57.22
-- Upside: 12.08%
Dollar General
TGT
DG
DLTR
FDO
4.52
2.85
2.68
3.59
Sales per Share
111.62
48.22
32.25
82.4
ROE
18.52%
19.72%
41.12%
33.77%
4.09%
5.95%
8.38%
4.40%
EPS
Profit Margin
Dollar General: DCF
DG
Analyst: Shengyu Cao
Date: 2013/3/28
Year
2012E
Revenue
14,516
% Grow th
2013E
16,060
10.6%
Operating Income
1,455
Operating Margin
Interest and Other
Taxes
Tax Rate
Net Income
1,526
% of Sales
Subtract Cap Ex
Capex % of sales
Free Cash Flow
1,952
22,669
8.0%
2,040
24,255
7.0%
2,183
25,953
7.0%
2,336
27,511
6.0%
2,476
2021E
28,886
5.0%
2,600
TERMINAL
2022E
30,042
4.0%
2,704
9.0%
9.0%
9.0%
9.0%
(218)
(161)
(177)
(193)
(210)
(227)
(243)
(260)
(275)
(289)
(300)
-1.0%
-1.0%
-1.0%
-1.0%
-1.0%
-1.0%
-1.0%
-1.0%
-1.0%
-1.0%
513
478
433
627
683
714
764
818
867
910
946
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
35.0%
887
1,033
16.5%
971
-6.0%
1,059
9.0%
1,099
3.8%
1,176
7.0%
1,259
1,334
1,401
1,457
7.0%
6.0%
5.0%
4.0%
319
402
477
578
630
748
849
960
1,073
1,155
1,202
2.20%
2.50%
2.70%
3.00%
3.00%
3.30%
3.50%
3.70%
3.90%
4.00%
4.00%
147
-353
-65
-208
-227
-218
-204
-218
-198
-173
-144
1.0%
-2.2%
-0.4%
-1.1%
-1.1%
-1.0%
-0.8%
-0.8%
-0.7%
-0.6%
-0.5%
145
128
106
193
210
227
243
260
275
289
1,202
1.00%
0.80%
0.60%
1.0%
1.0%
1.0%
1.0%
1.0%
1.0%
1.0%
4.0%
829
1,257
1,101
1,200
1,321
1,470
1,611
1,772
1,907
1,352
-13.5%
51.6%
-12.4%
9.0%
10.1%
11.3%
9.6%
10.0%
7.6%
-29.1%
21.4
23.6
10.1
11.0
306
$
$
9.0%
2020E
9.0%
8,072
9,032
17,104
6.19%
Shares Outstanding
1,791
20,990
2019E
9.0%
958
Current P/E
Projected P/E
Current EV/EBITDA
Projected EV/EBITDA
9.0%
2018E
9.3%
% Grow th
NPV of Cash Flows
NPV of terminal value
Projected Equity Value
Free Cash Flow Yield
1,643
19,256
2017E
9.3%
22.6%
Plus/(minus) Changes WC
10.0%
2016E
9.3%
724
% of Sales
17,666
2015E
9.5%
% Grow th
Add Depreciation/Amort
2014E
10.00%
4.0%
10.0%
Interest % of Sales
Current Price
Implied equity value/share
Upside/(Downside) to DCF
Terminal Discount Rate =
Terminal FCF Growth =
50.55
55.90
10.6%
47%
53%
100%
Terminal Value
Free Cash Yield
17.4
19.3
9.3
10.2
15.0
16.6
8.5
9.2
23,427
5.77%
Terminal P/E
16.08
Terminal EV/EBITDA
6.6
Dollar General: Multiples
Absolute
Valuation
High
Low
Median
Current
Target
Multiple
Target E, S,
B, etc/Share
Target Price
P/Forward E
25.3
15.2
18.7
17.9
18.5
3.05
56.425
P/S
1.2
0.8
1
1.1
1.2
47.3
56.76
P/B
3.9
2.3
3
3
3.32
18
59.76
P/EBITDA
10.8
6.27
8.58
8.58
8.57
5.9
50.563
P/CF
16.3
10.7
13.4
13.7
14
4.47
62.58
Target Price
57.22
Dollar General
Catalyst
• Same-Store Sales
Increased 4.7% last year
• Expansion plan of 635
new stores and 550
relocations in 2013
• Increases Share
Repurchase by $500
Million
Risk
• High Net Debt/Equity ratio
Leverage Ratio
FDO
DLTR
DG
2011
0.29
-0.02
0.53
• Limits on operating
margin upside
2012
0.25
-0.05
0.49
Review
New Holdings
Former Holdings
• F: 2.5%
• F: 3.0%
• DTV: 3.5%
• DTV: 2.8%
• CMCSA: 1.5%
• TGT: 2.7%
• DG: 2.2%
• KORS: 2.3%
• SBUX: 1.5%
• SBUX: 1.5%
• Projected Return: 13.5%