Starboard confirms a 1.7% stake in DLTR -- going outright active – spot on with our thesis that there’s a clear path to a $200 stock if the right levers are pulled by someone who wants to roll up their sleeves and get busy. Starboard nominating seven Directors (out of 12 seats) and wants a) Family Dollar sold – even if at a loss, and b) core Dollar Tree to break the dollar price point and move to being a multiple price point retailer. Both of these are right in line with the Activist Playbook that we laid out in September when we elevated it to a Best Idea Long (DLTR | TIME TO GET ACTIVE LINK). Starboard likely to have all the support it needs from existing shareholders to get something done. Even though the stock will be up today, this thing has a long way to go. Breaking the buck alone gets $2-$3 per share in incremental earnings and turns Dollar Tree back into a growth concept. I’d rather fix Family Dollar than sell it – more upside there – another $2-$3 in EPS based on my math. Either way this company finally breaks out of a $6ps earnings annuity – and you win.
Date: Thursday, January 10th, 2019 at 12:30pm ET
Confirmation Number: 13686308
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