Zambell Shops for Dollar Store Bargain

01/03/2003 12:00 am EST

Focus:

Nancy Zambell

Editor, Wall Street's Best Investments and Wall Street's Best Dividend Stocks

Nancy Zambell focuses on conservative, common sense investing. Among the important criteria in her stock selection process is a focus on stocks that are currently underfollowed by the investment community, but should gain greater attention in the future. For her top 2003 pick, the editor of UnTapped Opportunities selects Dollar General, which she feels will 'buck' the generally poor retailing trend.

"Dollar General (DG NYSE) is the 'dollar store' pioneer and remains the leader in this industry. The company is the largest general merchandiser in the country, serving 10 million customers per week in 5,620 stores. We believe this company offers exceptional growth opportunities in an under-served sector. Its target customers are those who earn less than $30,000 per year.

"The stores have a high turnover rate for its products (which are general staples) that generates consistent repeat business. The firm's everyday low pricing strategy is especially attractive in a slow economy. More than 1,300 items are priced at just $1, everyday. The stock is undiscovered by major analysts on Wall Street. In addition, the stock is undervalued. It is trading near its 52-week low, making the shares a bargain. My target price is a move to $25."

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