Appleseed Fund, an investment management company released its third quarter 2023 investor letter. A copy of the same can be downloaded here. The fund’s Investor Class returned 1.21% over the 12 months that ended September 30, 2023, underperforming the Morningstar Global Small/Midcap Index’s 15.13% return. Throughout the majority of last year, the Appleseed Fund was positioned for an economy of slow growth and inflation. However, with disinflation occurring later in the year, a strong stock market emerged, and Appleseed Fund’s cautious approach held back investment returns. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Appleseed Fund highlighted stocks like Dollar General Corporation (NYSE:DG) in the third quarter 2023 investor letter. Headquartered in Goodlettsville, Tennessee, Dollar General Corporation (NYSE:DG) is a discount retailer. On November 3, 2023, Dollar General Corporation (NYSE:DG) stock closed at $119.24 per share. One-month return of Dollar General Corporation (NYSE:DG) was 16.90%, and its shares lost 52.55% of their value over the last 52 weeks. Dollar General Corporation (NYSE:DG) has a market capitalization of $26.17 billion.
Appleseed Fund made the following comment about Dollar General Corporation (NYSE:DG) in its Q3 2023 investor letter:
“Appleseed Fund added three new names to the portfolio in the past three months: Dollar General Corporation (NYSE:DG), Wesco International (WCC), and Genko Shipping & Trading (GNK). DG is the leading U.S. discount dollar store retailer with over 19,000 stores in 47 states. DG’s stock price has been uncharacteristically weak this year due to a confluence of issues: inflation squeezing the core customer, labor limitations and execution challenges that are keeping the stores unevenly stocked, multiple guidance downgrades, margin squeezes, rising interest costs, and inflationary construction costs. Nevertheless, DG offers tremendous value to investors, beyond its compelling valuation. DG has an advantageously located store network with low rent and labor costs; its footprint is focused on thinly populated areas that cannot support numerous retailers. The Company’s business is highly stable with predictable sales and margins, while comps have been positive every year over the past 30 years, excluding the post-COVID-19 hangover year (and possibly the current fiscal year). It is important to note that its small basket sizes limits online competition. Not only does this business have high returns on capital and historically consistent margins, but it is also a highly defensive business in that rural consumers’ dollars go further than at any other retailer. Lastly, DG recently brought back well respected former CEO Todd Vasos out of retirement to right the ship.”
A busy shopping aisle filled with discounted items in a retail store.
Dollar General Corporation (NYSE:DG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 57 hedge fund portfolios held Dollar General Corporation (NYSE:DG) at the end of the second quarter, which was 53 in the previous quarter.
We discussed Dollar General Corporation (NYSE:DG) in another article and shared Artisan Mid Cap Value Fund’s views on the company. In addition, please check out our hedge fund investor letters Q3 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.
