Shares of discount retailer Dollar General Corp. (DG) have jumped 16.1% over the past month, after the company delivered in-line fourth-quarter performance, upped its quarterly dividends by 31%, and announced healthy guidance for 2022.
Additionally, this month the company also opened its first store in Idaho, taking its footprint to 47 states, and plans to evaluate more store locations in Idaho in the future.
With these developments in mind, let us take a look at the changes in DG’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Dollar General’s top risk category is Production, contributing six of the total 23 risks identified for the stock.
However, in its recent report, the company has added one key risk factor under the Ability to Sell risk category. Compared to a sector average of six Ability to Sell risk factors, DG has five.
DG highlighted that its success hinges in part on the company’s ability to defend its reputation, as well as that of its products and services. Failure to comply or any accusation of non-compliance with regards to a range of factors, including ethical, social, product, labor, consumer protection, data privacy, or environment could adversely affect DG, and also leading to potential regulatory actions, litigation, and government investigations.
Moreover, negative visibility or public comments on social media, whether accurate or not, may also lead to a negative reputation for the company. Such an event could mean lost sales, loss of opportunities, or employee attrition for the company.
Hedge Fund Activity
According to TipRanks data, Wall Street’s top hedge funds have decreased holdings in Dollar General by 332,500 shares in the last quarter, indicating a very negative hedge fund confidence signal in the stock based on activities of 18 hedge funds. Notably, Ray Dalio’s Bridgewater Associates has a holding worth about $115.14 million in DG.
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