Big Lots: Still Cautious But Now Cheap

May 23, 2022 2:19 AM ETBig Lots, Inc. (BIGGQ) StockBIGGQ38 Comments

Summary

  • Big Lots is dealing with a tough macro environment but aiming high with its long-term revenue and operating margin targets.
  • Cost inflation and supply chain disruptions are pressurizing margins.
  • BIG is one of the cheapest retailers available in the market today using EV/EBIT and EV/FCF assessments.
  • With $159 million available on the repurchase authorization as of Q4, buybacks are now very accretive.

Woman buying a gift

Juanmonino/E+ via Getty Images

In my previous article on Big Lots, Inc. (BIG), I argued that investors should stay on the sidelines due to weakening consumer sentiment, falling margins, that the company would miss Q4 earnings, and that a low buyback relative to market cap

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This article was written by

Equanimity Investing helps you focus on protecting your principal and thinking long-term with your investments. I'm long treasuries, select high-quality companies, and will never use margin. As a generalist, I cover multiple sectors with a dividend and non-dividend long-only stock strategy over a 5-10+ year investment horizon. I also cover macroeconomics regarding monetary policy and excessive debt levels globally.All articles/blogs are for informational and entertainment purposes only. Under no circumstances should any of these articles/blogs or any published information be interpreted as investment advice, or as an offer to buy/sell any financial security. Perform your own due diligence. I welcome comments and corrections of all kinds.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in BIG over the next 72 hours. 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.

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