12th Street Asset Management Company LLC, a hedge fund based in Nashville, bought more shares of Dollar General Co. (NYSE:DG), a discount retailer with over 18,700 stores in 47 states. The hedge fund increased its stake in DG by 8.1% in the third quarter of 2022, according to a recent filing with the SEC. It now owns 143,222 shares of DG, worth about $34 million6. This makes it one of the largest shareholders of DG, with about 9.6% of its portfolio invested in DG.
The hedge fund may have seen Dollar General as an attractive investment opportunity because of its strong performance and growth potential. DG has been expanding its store network, offering low prices and convenient shopping to customers, especially in rural areas where it faces less competition. DG has also been investing in digital initiatives, such as online ordering and delivery services, to enhance its customer experience and loyalty. DG reported higher sales and earnings for fiscal year 2022 despite facing challenges from the COVID-19 pandemic and supply chain disruptions.
However, Dollar General missed analysts’ expectations for its fourth-quarter earnings on December 1. The company cited higher costs and lower margins as some of the reasons for its disappointing results. The company also issued a cautious outlook for fiscal year 2023 due to uncertainty over consumer spending patterns and inflation pressures.
