In march, I asked if ATD was priced for perfection. ATD then reached a high around $85.
I wonder now about my DOL shares. I wanted to sell in the last months, but did not, because the stock keeps going up. With a PE of 37, and a high around $137, I fear that any problem with China would affect their supply. Do you know if DOL go thru third party’s warehouses or have their own China contacts? Do you have any data on the percentage of their business from Chinese items- should be quite high?
Covid did not stop them, so should we be worried?
Thanks
China is one of the primary suppliers of DOL’s products along with 25 other countries (emerging and developed). However, the company did not disclose the percentage of the cost of goods sold attributed to China. Although we think the relationship is meaningful, we think the supplier base is diverse and this risk could be mitigated.
It is tough to identify high-quality compounders such as DOL. Compared to other industry players such as DG, DLTR, FIVE, etc. DOL is an above-average operator. We think holding on to winners tends to be a safer bet and long-term investors should not be too concerned if the stock is temporarily slightly overvalued. What matters is the company’s long-term prospects and execution.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in FIVE.