The country is still mired in a long recession. Many businesses are closing their doors. Others are cutting back, laying off employees and reducing production. But with every crisis there is opportunity. Such is the case for Dollar General (DG). In a time of high unemployment and low wages, consumers are counting every penny. Dollar General stores offer deep discounts, even beating discounters like Walmart (WMT).

In the most recent quarter, Dollar General's income rose by 69%. The company also raised its full-year guidance by 10% to $3.22 billion.

Recessions are a good time for discount retailers. Dollar General (DG) is a retailer of low priced goods, which are in demand during this period of high unemployment. Consumers have less to spend and gravitate to stores like Dollar General.

The Wall Street Journal (subscription required) reported that Dollar General's fiscal third-quarter profit rose to $128.1 million or 37 cents a share, up from $75 million or 24 cents a share a year earlier. Sales rose 10% to $3.22 billion and were 4.2% higher on a same-store basis. Compared to prior years, sales were up 13% and 9.2% respectively.

If I was making my 2010 picks list today, I might have found a spot for Ross Stores (ROST), the holding company for Ross Dress for Less. Analysts have a hold or market perform rating on the stock, but that is meaningless to me. What does have meaning is 20% sales growth in a dismal year, contributing to a PEG ratio of .75 and an under market P/E of 12.66 (averaging trailing and future figures).

These are very good numbers, however, in reviewing some of the data points with Raphael P., a helpful broker in the Pleasant Hill, CA Wells Fargo (WFC) office, I was reminded that different financial sites have varying numbers. They usually vary by small fractions, as did the Wells data compared to the Aol (AOL) Money and Finance site, so I would encourage investors to check multiple sources.

Family Dollar (NYSE: FDO) has had quite a run. Over the year shares in the super discount store chain have risen by roughly 65%, rising from just under $20 on April 7, 2008 to a closing price of just over $33 on April 6, 2008. The obvious reason is the awful economy.

Earnings later this morning are hotly anticipated. Our Piqqem Sentiment for Family Dollar is positive but beginning to trend down. Will cheap keep beating the Street?

In The Cabot Benjamin Graham Value Letter -- which assesses stocks based on Graham's value investing critera, editor J. Royden Ward takes a look at Wal-Mart Stores (NYSE: WMT).

"In this month's Classic Benjamin Graham Value Model, our calculation suggests that the Dow is overvalued at 12,370 and undervalued at 8,305; as such, today the market is extremely undervalued.

"This low-risk environment means it's probably a great time to add risk by dabbling in our recommended stocks such as Wal-Mart Stores.

"How cheap is it? The recent decline in WMT shares has created an outstanding buying opportunity for investors. WMT shares now sell at only 12.3 times forward EPS with a dividend yield of 2.0%.

I grew up in the 1970s and recall fondly watching the TV series "Dallas" with my family on Friday nights. Everything on the culturally sensational show was big, including its storylines.

Of course, one of my favorites was "who shot J.R.?" But another favorite was the return of Bobby Ewing after a supposed death that was resolved by stating the entire season was a dream.

I like to use the dream analogy for stocks that have made a round trip journey in a short period of time. If a stock goes up only to return to the level previously, it is as if the investor woke from a dream and the stock never actually moved up.

Such is the story of closeout retailer Big Lots (NYSE: BIG).

Shares started the year around $15 per share. Enthusiasm over profits and performance as consumers in a struggling economy sought lower-priced options fueled a gain in BIG.

Shares more than doubled in value, but hit a roadblock in late August. At that time, earnings that beat estimates were not enough to keep the momentum going. I wrote about the company at that time and suggested that investors in BIG should take money off the table.

Not all retailers are created equal.

Some are better than others and that has become abundantly clear during this economic recession. While the entire sector has been struggling, there are pockets of strength.

That strength comes from the discounters. Led by discount king, Wal-Mart (NYSE: WMT), consumers have been flocking to these stores looking for a bargain. Nothing motivates more than a deal on a cash-starved budget.

Wal-Mart and others have been cleaning up in this environment. Yes, the operating environment is challenging no matter what your prices, but those with the lowest prices are faring much better than those with higher ones.

That is why yesterday's news from Costco (NASDAQ: COST) was so disturbing.

The company announced its first-quarter earnings, and the results were less than stellar.

COST stated that in the period that ended Nov. 23, profits were only up fractionally as compared to the same period last year, even though revenue was up 4%. The company generated a profit of 60 cents per share that missed analyst expectations by 2 cents.

Although it's not a big miss in the scheme of things, I'm disappointed with the results.

When the Bureau of Economic Research declared that the recession had officially begun in December 2007, the entire retail sector shrugged its shoulders and said, "No kidding."

Shares of companies that deal directly with the consumer, except for the deep discount retailers, have known for some time that the economy was struggling. Sales have been declining steadily and, with the deteriorating operating environment, shares of the retail stocks have been absolutely crushed.

The entire retail group is one of the biggest losers in the market this year, with some stocks down 80% to 90%.

That said, those retailers that offer big discounts, including Wal-Mart (NYSE: WMT) and Big Lots (NYSE: BIG), are doing much better on a relative basis.

"Wal-Mart (NYSE: WMT) delivers amid the recent retail meltdown," says Richard Moroney, editior of Dow Theory Forecast, a blue chip service that has been published for over 50 years.

The advisor adds, "The company stands to benefit as cost-conscious shoppers shift away from convenience in favor of value." Here is his review of the stock, which earns his "long-term buy" rating.

"As evidence of strain on the U.S. consumer mounts, Wal-Mart Stores continues to post solid results.The nation's biggest retailer delivered U.S. same-store-sales growth of 2.4% excluding gasoline sales in December, while rival Target (NYSE: TGT) saw same-store sales fall 5% and other discounters and department stores also delivered bad news.

"With decent operating momentum and solid long-term growth prospects, Wal-Mart shares seem reasonably valued at 14 times the consensus profit estimate for the year ending January 2009. Meanwhile, the company is getting bigger and better.