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Buying Big 5 Sports Stock Aggressively

Patrick Doyle profile picture
Patrick Doyle


  • I think the market is too pessimistic about the expected drop in sales and earnings from the record highs of 2021. I want to try to take advantage of that.
  • I think the dividend is well covered, and the recently announced buyback will be supportive of price. I think shares are objectively cheap, even compared to an inevitable downturn.
  • Thankfully, the market's pessimism means that it's possible to earn a 10% yield on deep out of the money puts. If exercised, the dividend yield jumps to 12.5%.
Sports balls on the field with yard line. Soccer ball, American football and Baseball in yellow glove on green grass. Outdoors

anton5146/E+ via Getty Images

It’s been about three and a half months since I started looking at Big 5 Sporting Goods (NASDAQ:BGFV), and in that time, the shares have been virtually cut in half, down 48.2% against a loss of about 8% for the S&P 500. In

This article was written by

Patrick Doyle profile picture
I'm a quant investment newsletter writer who marries fundamental analysis with the latest research in momentum. Over the past few years, I’ve developed a piece of software that helps me track the level of optimism and pessimism embedded in stock price. I seek to challenge the assumptions embedded in price by profitably exploiting the disconnect between what the market thinks and what is a likely outcome. I invest in those companies that have a greater than average chance of giving us all a surprise in the next few months.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BGFV either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

In addition to buying 800 shares, I just sold 10 of the puts described in this article for $.90.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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