It's not just news anchors that can misrepresent things

Barron’s featured low-end retailer Dollar General (DG) as a bargain stock this week. Their teaser line said that DG shares are depressed in price.

Huh? Dollar General closed last week at $68.82. That was up from $26.72 three years ago and $42.14 near the beginning of 2013. The stock bottomed at $53 as recently as last summer.

How, then, can DG be called underloved and neglected?

Columnist Avi Salzman projected that DG can get to $80 or so, representing 20x year ahead expectations of $4.00 (FY 2015 ends Friday near Jan. 29, 2016).

Is that realistic based on Dollar General’s past trading history? Not really.

DG went private in July of 2007. It came public again on Nov. 13, 2009. The firm has done very well since then, growing EPS from $1.82, in FY 2010, to about $3.50 in the year just completed.

Value seeking investors could buy DG at P/Es ranging from 11.7x to 15.1x forward earnings on four separate occasions during the last five years.

When the stock heated up to an almost 20 multiple, at $56 in 2012, the shares went down to sideways for two full years even as fundamentals kept improving.

Read More at: GuruFocus.