Trading Nation

Dollar General is surging, and traders see more gains ahead

Why Dollar General is an outperformer among discount retailers

Dollar General is surging Thursday morning. 

The stock was in rally mode after topping earnings and revenue estimates in its recent quarter. 

Mark Tepper, president of Strategic Wealth Partners, says the company and its shares should continue to outperform. He notes that the majority of its revenue comes from perishables such as food and home products, while its geographical footprint in rural areas means it has a strong presence in many markets.

"Management's doing an awesome job managing prices, costs, inventory, and of all these names, Dollar General is the least exposed to tariffs," said Tepper on CNBC's "Trading Nation" on Wednesday. "We're letting our position ride. But if this thing would pull back to about $125 ... we'd be buying a heck of a lot more."

A move to $125 implies 18% downside from current levels. That would also mark its lowest level since May.

Ari Wald, head of technical analysis at Oppenheimer, sees further upside for Dollar General.

"Here's a stock rated outperform by our fundamental analysts and a stock that continues to maintain its bullish trend," said Wald on CNBC's "Trading Nation. "The standout chart here is Dollar General relative to the S&P 500, breaking through multiyear resistance dating back to the year 2016. That argues for continued leadership in this stock, it's got good momentum behind it. Good trend. Dollar General, we're buyers."

Disclosure: Strategic Wealth Partners holds Dollar General.