After a correction phase, Dollar General is coming back to attractive prices.

From a fundamental viewpoint, the qualitative Surperformance ratings of the company highlight its strong fundamentals. Revenues are constantly growing, +48% since 2010, and estimations are that sales should rise of 9% during the current exercise. The financial situation has been improved. Thus, debt has been wisely managed to reduce the leverage, from 2.50 in 2010 to 1.11 at the end of the last fiscal year. The group seems undervalued relatively to its peers with an EV/Sales of 1.02 and a P/E ratio of 15.5x 2015 estimates.

After several weeks of horizontal fluctuations within the mid-term range USD 54.74 / USD 58, the stock is coming back close to the lower limit of this range. The USD 54.75 area could cause a positive reaction for the coming trading sessions and allow a technical rebound towards USD 58.

So as to make the most of a potential technical rebound of Dollar General, it seems opportune to take a long position at the current price. A technical rebound would enable the security to reach the USD 58 resistance. Investors should placed a stop loss under USD 54.75 in case of a bearish outbreak.