Big Lots pain thread

[and4rik]

Hi all, new to investing in the rigged stock market here. Looking for others take on Big Lots (BIG) stock. I myself have been buying and averaged my price to 11$. What I definitly don't understand is with 1400 stores nationwide and a market cap of $245,000,000 at stock price of $8.50 that would make the average value of each store $175,000. Of course we are not including warehouse inventory locations and online business/delivery as well. What am I missing here, the investor prospectus seems to clearly illustrate goals and achievments in a transparent way, although I admit I am unable to decipher tables with earnings, debt, and loses. Is this just a case, but in the opposite direction, of a meme stock gone wild. Dividend payout is still .30 per quarter, so my only real fear is a total bankruptcy out of nowhere. I have resisted stocks for my entire life, rational being with gold/silver even if the price goes down zero is not a real possibility.

[t00nces2]

BIG looks like it is failing. Look at Bed, Bath and Beyond and other discount retailers that have failed. Might be a good idea to bail on BIG. Just my opinion.

[insidedealer]

Before I analyzed this stock, my first thought was NO....I always say no to retailers and have for decades....unless there's something in the voodoo that they do that I personally think is hard to replace or copy, and they have some entrenched foothold, and they're selling something that's pretty definite to be something needed/wanted not only now but 50 years from now.

I get mixed messages after analyzing things. Financially speaking, the value of a stock is the net present value of future dividends. This company is paying a high dividend, near 15% of the price of a share, which seems unsustainable, especially as they are currently losing money. Basically, my thought was the dividend needs to continue at 1.20 a year for the next 10 years or so to make the $8 per share price "worth it". A little deeper dive says they can financially afford to pay 1.20 per share per year......there's only 35 million shares, so it's only 42 million, and we have a company here with 2 billion a year in gross profit. Trim the operating expenses a bit and their net loss turns quickly into a net profit. They did have a history of actually making a net profit of around 250 million a year until this last year when they had a 250 million net loss. They were making money for years as opposed to Bed Bath Beyond and most other physical store retailers, which have been losing money consistently each and every year.
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A look at who owns the stock reveals that you're in good(sic) company, the biggest and best institutions(Blackrock, FMR, Vanguard, Goldman, etc) own most of the shares, somehow they own an incredible 116% of the shares, I don't know how, some feat of financial legerdemain, but THEY own this stock. THEY find it worthwhile.
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I've never been in a Big Lots store so I checked out what they sell, thinking whatever it is, Amazon could do it better or cheaper. But I find they smartly are geared towards larger items that aren't shipping friendly, adding value to a physical location. I like their whole product line, even their foods are a group of diverse but interesting items. I need to visit a store if only to buy some of their offered foods anyway, but also to see how that experience is. Are there enough employees, how are things displayed, customer service, etc. I'll add my thoughts there after the visit, but pending that visit this company might be one of the very rare exceptions to my no retail thought.

[and4rik]

Good info, there used to be a store next to me that I would frequent regularly, really nothing special as it should be. I liked the prices and they had more and better stuff than the .99 cent store. Q-tips and othe toiletries, brooms, plastic containers, furniture and patio stuff, food, textiles, and other home electronics, I remember seeing a crock pot there once. Point is it was cheaper, and a much smaller store to navigate than say Target or wal-mart. They also had a bargain bin full of DVD movies you could go through, so a day at the house seems covered. As I said, stocks are new territory for me. All the other home goods bankruptcies caught my eye but a decorative niche store like Tuesday Morning going out of business in today's online marketplace is really no surprise.

[Redrum]

insidedealer - It is a bad sign when you see over 100% ownership. Many times the reason for exceeding the 100% holding mark may stem from short selling between investors.

[insidedealer]

insidedealer - It is a bad sign when you see over 100% ownership. Many times the reason for exceeding the 100% holding mark may stem from short selling between investors.

Thank you Redrum. I thought that short selling might have something to do with that over 100% ownership number, but did think it(the short-selling/hedging?) was more good than bad, or ugly. I respect your input here it makes me want to look into that stat further.

[t00nces2]

I've never been in a Big Lots store so I checked out what they sell, thinking whatever it is, Amazon could do it better or cheaper. But I find they smartly are geared towards larger items that aren't shipping friendly, adding value to a physical location. I like their whole product line, even their foods are a group of diverse but interesting items. I need to visit a store if only to buy some of their offered foods anyway, but also to see how that experience is. Are there enough employees, how are things displayed, customer service, etc. I'll add my thoughts there after the visit, but pending that visit this company might be one of the very rare exceptions to my no retail thought.

Think of a K-Mart after the Christmas sale.... Dollar Store... Amok.

[Redrum]

On Seeking Alpha they note the short held float is at 35.76%. https://seekingalpha.com/symbol/BIG

[and4rik]

An older article but shorting BIG has been a thing for a while now

https://www.fool.com/investing/2022/...%20its%20float.

[Redrum]

Seeking Alpha analysis page shows the short holdings are at 35.76%. https://seekingalpha.com/symbol/BIG