Bill Ackman is having a big week because of JCPenney.
But one of his ideas, should he be correct, could be a REAL doozy.
Ackman thinks Family Dollar has the makings of a real winner should the right leveraged buyout team pick them up, fix them up and relaunch them into the world of finance.
If he gets investors to join in, it could turn into a major competitor to Walmart, and Ackman stands to make an outrageous fortune.
Ackman gave a presentation on Family Dollar (in which he doubled his personal stake to 8.9%) to potential investors that he titled “All in the Family.”
Source: Market Folly
... that can under-price competitors in multiple sectors like grocery, pharmacy and hardware, but can also co-exist with smaller, competitive businesses...
... both of which can be traced to FDO's strong sales of consumables (goods that need to be re-purchased)...
... which generate more and revenue that Ackman believes that FDO can spend to increase its amount of stores nationally by about 50%.
FDO's return on investment capital is consistently strong, an annualized average rate of 20% over the last decade...
... and factors in that Dollar General has more stores and more revenue after a leverage buyout by KKR in 2007
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