/biz/ - Business & Finance

>>57860196
I don't think it will be but BIG currently is undervalued as bankruptcy is not imminent yet - in 6 to 12 months it will be. The undervaluation gives opportunity for aggressive plays. Won't be short squeezed, many sites are reporting 40% or more short interest but those figures are wrong, it's about 15%.

>>57717075
>to obfuscate people from finding bbby
Finding bbby? Buddy there's nothing to buy or sell anymore.
>>57716515
If BIG is not profitable within one year they're done for
>>57716526
Trading volume suggests GME is dying out

>>57677799
>gme
>bbby
Yes, this is a SWING play. BIG is looking like GME 2.0. It's a risky play and volatile if it works so you need timing on your side for an optimal exit. Second post already has my exit positions which line up with P/E ratios of other retailers.

>American discount retailer Big Lots
Big Lots invest thesis summary: bankruptcy or 10x+ returns. It's a very high risk play!

>Bankruptcy is likely
American discount retail chain Big Lots (NYSE: $BIG) in trouble
Long-term debt of $533M in asset-based lending facility
Net loss $-463M (ttm)
6 quarters of deeply horrible negative EPS figures
$46.6M in cash, sold California distribution center (Apple Valley) and 23 stores

>Shorts still greedy, /smg/ still bearish
Shares Short (Jan 31, 2024): 6.41M
Outstanding shares: 29.22M
22% short interest

>Quickly return to profitability
Executives are reducing costs with project springboard
Project springboard: $200M+ savings in COGS, SG&A and increasing margins in 2024
Inflation is hitting hard, consumers are ditching Target and Walmart, favoring budget stores instead
If interest rates drop, housing market gets more demand meaning more sales for BIG in soft/hard home categories

>Juicy low stock price
Price/Sales (ttm) 0.02
Price/Book (mrq) 0.34
Book ratio is misleading as inventory will not be able to be sold for full price if Big Lots goes bankrupt. Don't be a BBBYQ baggie.

>Michael Burry is in
Q4 2023 13F of Burry's fund Scion Asset Management, LLC
$BIG 225,000 shares
Bought between $807,750 to $1,822,500
1.85% of portfolio

>Insider buys
2023-12-01 Christopher McCormick buys 12,000 shares at $6.29. He is Capital Allocation Chair on the board
May-July 2023: 4 buys of directors and CEO, total of 74,00 shares at prices between $4.853 - $5.005

GME 2.0? Meme short squeeze could be a play, social media is picking it up.
>Buckle up: WAGMI

Big Lots $BIG in trouble:
If they don't quickly return to profitability bankruptcy is likely. Shorts are betting on it, 22% of outstanding shares shorted.
But after 6 quarters of deeply horrible negative EPS figures, things are starting to look up,
>$0.16 positive EPS for Q3 due to "gains on the sale of real estate and related expenses"
>EPS is expected to be strongly improved YoY for Q4, retails strongest quarter
>inflation is still hitting hard, consumers are ditching TGT and WMT, favoring budget stores instead

Currently BIG is trading close to ATL ($135M mc) and in Q4 2023 Michael Burry (Scion Asset Management) bought in with 225,000 shares, per the latest 13F.
Share price as of last friday is $4.62, making it a cheap gamble. Of course there is a meme short squeeze element in play as well.
>Price/Sales (ttm) 0.02
>Price/Book (mrq) 0.34
Once cost savings are in and EPS is profitable, P/E ratio is expected to go to 20-30, same as Dollar General, Dollar Tree, TJ Maxx, Ollie's, Wallmart, Target. So far they sold their California distribution center (Apple Valley) and 23 stores. But if they survive long enough Burry may be interested because there is an opportunity for an extremely aggressive share buyback play.
>$159M allocated for share buybacks
>current market cap of $135M
>ample liquidity thanks to 22% short interest

If in the following quarters they can reduce their losses and scramble enough cash for A) general business B) debt down payments and C) share buybacks they can buy up to 99% of shares outstanding.

Preliminary Q4 results:
>"we generated substantial cash flow in the quarter, which was used to pay down debt on our $900 million asset-based lending facility."
Very high risk play, could make returns for shareholders exponentially higher should they manage to return to their historical annual net income of $100M+.
>current net loss $-463M (TTM)
>could allow the company to take advantage of their low stock price (price/sales 0.02, price/book 0.34)