Shares of Dollar General are having a wild and woolly Monday after rivals Dollar Tree and Family Dollar said they will join forces in a $9.2 billion deal. After opening down a good bit from its Friday close, the stock (Ticker: DG) rose steadily as several market watchers disseminated some ho-hum opinions of Dollar Tree's purchase plans, then retreated again to enter the final half hour of trading down slightly from Friday. Volume is on track to be more than four times the daily average.
What that says about overall investor sentiment is hard to pin down. But options traders are more optimistic now about the Goodlettsville-based company's shares than at any point in the past year. The pros at Schaeffer's Investment Research have the numbers.
Two of Dollar General's biggest competitors are set to join forces via an acquisition worth $9.2 billion. Dollar Tree plans to buy beleaguered Family Dollar to create a company with more stores than and roughly the same sales than Goodlettsville-based Dollar General.
"This is a transformational opportunity," stated Bob Sasser, Dollar Tree's Chief Executive Officer. "With the acquisition of Family Dollar Stores, Dollar Tree will become a leading discount retailer in North America, with over 13,000 stores in 48 states and five Canadian Provinces, sales of over $18 billion, and more than 145,000 associates on our team. We will continue to operate under the Dollar Tree, Deals, and Dollar Tree Canada brands, and when this transaction is complete, we will operate under the Family Dollar brand as well."
Shares of Dollar General (Ticker: DG) are down 3.6 percent in pre-market trading.
SEE ALSO: One more time, mulling a Dollar General-Family Dollar deal from last month
A stock trading plan set up last month on behalf of Ryman Hospitality Properties Chairman, President and CEO Colin Reed was hard at work this week. After generating profits of about $1.1 million Friday and Monday, the plan on Tuesday and Wednesday exercised another 50,000 options and then sold the resulting shares. Reed's profit on those transactions topped $1.5 million. Ryman shares (Ticker: RHP) closed Thursday at $49.27, less than 2 percent their recent highs.
Shares of Healthways (Ticker: HWAY) are up more than 12 percent in the last of hour of trading today after Dougherty & Co. analyst Brooks O'Neil lifted his rating on the company to 'buy' from 'neutral' and said he sees the stock climbing to $20. The move came after Healthways published its second-quarter profits and said it expects to put up better margins for the rest of this year. "We still believe the earning power of the business far exceeds its current level and we think the presence of the agitator group (now with 3 board seats) has put incremental pressure on management to deliver solid results this year," O'Neil wrote. "Our thinking has evolved over the past few months to include a realization that there is limited downside and potentially positive upside here."
Also benefiting from a post-earnings analyst call is Tractor Supply. Feltl & Co. analyst Brent Rystrom now rates the stock a 'buy' instead of a 'hold,' and Rystrom now sees the Tractor Supply shares (Ticker: TSCO) headed to $68 from their Wednesday close of $61.07.
Richard Close at Avondale Partners has reaffirmed his buy rating and target price of $33.50 for HealthStream, saying that the workforce development company has multiple avenues for growth in addition to its ICD-10 training products. Revenue growth excluding ICD-10 has accelerated above 20 percent, Close said, and the company's other service lines should "foster growth and ease headwind of ICD-10 roll-off."
At about 1 p.m. Central Tuesday, shares of HealthStream were among the market's biggest movers, climbing almost 20 percent to about $26.50 on the back of its solid second-quarter earnings. Volume was heavy, with the number of shares changing hands on track to triple the stock's daily average.