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Finding Dollars In Today’s Hottest ETFs

What starts out good doesn’t always end that way – just ask any Cubs fan! That was the story today for stocks as the market popped out of the box, only to fade faster than my cubbies in the summer!

For Cubs’ fans, you always have to wait ‘til next year, but for investors and traders, there are winners every day. You just need to know where to look, and that’s where our ETF Performance Heat-Map comes in most handy.

Today’s number 1 performing equity based ETF was iShares MSCI USA Index (EUSA). The exchange traded fund focuses on US companies which qualify for the MSCI ACWI revealed some interesting clues on what Wall Street might be thinking.

After clicking on EUSA’s green square in the performance heat-map, we see a handful of what ETF Stocks would call “skinny wallet” retail stocks as top performers.

Companies like:

  • Dollar General Corporation (DG)
  • Dollar Tree, Inc. (DLTR)
  • J. C. Penney Company, Inc. (JCP)
  • Kohl’s Corp. (KSS)

Admittedly, none put the ball in the bleachers beyond the Wrigley ivy, but on a day when just about everybody else struck out, walks and singles will do.

Of the quartet, the charts for DLTR and DG appear to offer the most upside. Both of the dynamic dollar store duo’s stocks are on the verge of breaking out to new highs. And, as the Wall Street cliché goes, new highs tend to be followed by new, higher highs.

Of the two, Dollar General offers lower downside* to the closet technical support level on its chart, and sports better valuations in 5 out of 6 important metrics.

  Dollar General (DG) Dollar Tree (DLTR)

8.20% 9.93%
Current P/E 19.98 21.24
Forward P/E 14.37 16.72
PEG Ratio 0.97 1.1
Price/Sales 0.93 1.48
Price/Book 2.91 5.83
ROE 16.23% 30.42%

* downside is based on ETF Stocks’ technical analysis.

Traders might wait for DLTR and DG to close at 52 week highs to confirm breakouts; while, longer-term investors that are looking for companies that could benefit from a sluggish economy, should consider initializing a half positions.

If Dollar General falls to support at $34.90 and bounces, double up; otherwise, get out and cut losses. Follow the same strategy for Dollar Tree with $69.64 as the double up or get out price.

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