Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” first-quarter 2023 investor letter. A copy of the same can be downloaded here. The fund returned 14.06% net in the first quarter compared to a 14.37% return for the Russell 1000 Growth Index and a 7.50% return for the S&P 500 Index. The first quarter was different from 2022. Technology, communications services, and consumer discretionary sectors were strong, while financials, energy, healthcare, and utilities sectors all had negative returns, which was opposite to the sectors’ performance last year. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Polen Focus Growth Strategy highlighted stocks like Dollar General Corporation (NYSE:DG) in the first quarter 2023 investor letter. Headquartered in Goodlettsville, Tennessee, Dollar General Corporation (NYSE:DG) is a discount retailer. On April 25, 2023, Dollar General Corporation (NYSE:DG) stock closed at $219.44 per share. One-month return of Dollar General Corporation (NYSE:DG) was 5.94%, and its shares lost 9.88% of their value over the last 52 weeks. Dollar General Corporation (NYSE:DG) has a market capitalization of $48.081 billion.
Polen Focus Growth Strategy made the following comment about Dollar General Corporation (NYSE:DG) in its Q1 2023 investor letter:
“Our February 2021 trades in Dollar General Corporation (NYSE:DG) and Amazon (AMZN) are illustrative of what we were seeing. We decided to sell our position in DG to fund a new purchase of AMZN. In Figure 2, one can see that DG was trading at a premium to its 10-year average, while AMZN was trading at a significant discount to its 10-year average.
At this point, we expected DG to be able to grow its EPS at just under a 15% annual rate over the coming five years, given its maturity and more limited ability to grow its store count from its huge base, which was approaching 20,000 stores in the U.S. We expected Amazon to grow its EPS at a greater than 30% pace, driven by the secular growth of e-commerce, cloud computing and digital advertising, while simultaneously experiencing a large margin-enhancing mix shift as its fastest-growing businesses have much higher margins than the company average. The combination of EPS growth and P/E multiple compression we were expecting for each company is laid out in Figure 3 below…” (Click here to read the full text)
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Dollar General Corporation (NYSE:DG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held Dollar General Corporation (NYSE:DG) at the end of the fourth quarter which was 59 in the previous quarter.
We discussed Dollar General Corporation (NYSE:DG) in another article and shared the list of cheap reliable stocks to buy. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
