Earnings Beat Lifted Dollar General (DG) in Q4

Pzena Investment Management recently released its fourth-quarter 2025 commentary for “Pzena Focused Value Strategy.” A copy of the letter can be downloaded here. The fourth quarter was defined by strong AI momentum and continued market dominance by mega-cap stocks. In this environment, Pzena Focused Value Strategy underperformed the Russell 1000® Value Index, delivering a net return of 2.5% vs. 3.8% for the Index. Given the limited leadership in the market, the firm still observes appealing valuation differences and believes the current environment is favorable for long-term value investors. In addition, you can check the Fund's top five holdings to see its best picks for 2025.

In its fourth-quarter 2025 investor letter, Pzena Focused Value Strategy highlighted Dollar General Corporation (NYSE:DG) as one of its leading contributors. Dollar General Corporation (NYSE:DG) is a discount retailer that provides various merchandise products. The one-month return of Dollar General Corporation (NYSE:DG) was 3.24%, and its shares gained 100.69% of their value over the last 52 weeks. On January 30, 2026, Dollar General Corporation (NYSE:DG) stock closed at $143.43 per share, with a market capitalization of $31.572 billion.

Pzena Focused Value Strategy stated the following regarding Dollar General Corporation (NYSE:DG) in its fourth quarter 2025 investor letter:

"Consumer discretionary, financials, and consumer staples were the largest contributing sectors during the quarter. The largest individual contributor was discount retailer Dollar General Corporation (NYSE:DG), which delivered strong same store sales and margin improvement, resulting in an earnings beat. Store traffic increased as higher-end customers traded down from grocery and pharmacy channels, while continued progress on shrink provided a tailwind to margins that are expected to persist into 2026."

Dollar General Corporation (NYSE:DG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 54 hedge fund portfolios held Dollar General Corporation (NYSE:DG) at the end of the third quarter, compared to 55 in the previous quarter. While we acknowledge the potential of Dollar General Corporation (NYSE:DG) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Dollar General Corporation (NYSE:DG) and shared the list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.