Discount and dollar stores have seen a flurry of deal activity in recent months, which should make them a hot commodity, Reuters reported.

Retailers that sell low-priced and close-out goods have little chance of running short of customers who cannot afford higher-quality and more expensive items, especially after the global recession. But investors have cast the discount retailing business out of favor even though their fundamental financial condition is good.

These companies should be attractive targets for companies and private equity firms looking for buyouts.

“Sales (at discount retailers) are fairly steady and (those stores) are selling a lot of consumable products and a lot of necessities,” said FBR Focus Fund portfolio manager Brian Macauley, in an interview with Reuters.

Recently, the 99 Cent Only Stores founding family teamed up with private equity firm Leonard Green to take the company private for $1.34 billion. Close-out retailer Big Lots Inc. is reported to be considering a sale. Family Dollar Stores Inc., which recently rejected a $7 billion offer from Nelson Peltz’s Trian Group, is also available.

Global private equity-backed deals totaled $43 billion so far this year, up 52 percent from the first quarter of 2010.