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BIG - Big Lots


mpauls

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I own some, bought a little pre LBO talks, and bought more after the buyout talks fell apart and the stock fell. It's a great company, with great management. Management are pretty good capital allocators, they know the stock is cheap and hence are buying back stock and shopping the company. They also made a very good acquisition of Liquidation World a while back which demonstrates the acquiring ability.

 

I'm a little worried about counter cyclicality if the economy ever takes off, but that can be modeled into earnings a little bit and I don't think the multiple would rise above low double digits.

 

With that being said I have sold some recently and put the money into cheaper stocks as BIG is a defensive stock and has held up very well lately, even gaining a bit since the market dislocation. BIG is absolutely as cheap but relatively less expensive now than they were a month or two ago.

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  • 1 year later...

Figured I would bump this one up considering the market is up big today and BIG is near its 52 week low. Execs are being investigated for unloading shares before an earnings miss. CEO announced retirement after selling 10M of stock. ESL sold for three straight quarters and then started buying in Q3. Anyone following the company have any thoughts or opinions?

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I'm not thrilled with how Seth Marks took over LQW (Liquidation World) and then had them taken over by Big Lots. The entire thing smelled bad to me and I even wonder about the legality of it. In hindsight it almost appears as if Marks was not acting in LQW's best interests, when he was CEO but rather, was furthering Big Lots agenda the entire time.

 

That did not turn out well for LQW shareholders. Fortunately I made money on LQW but a lot of people were not so fortunate.

 

Thread here: http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/lqw-to-liquidation-world/10/

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I've owned BIG since summer of '11 ( it's been a round trip  :'(). Thought it would have been taken out by now. I still think it's a good fit for a PE firm that can tighten it up. It's a cash machine, except in 2012, where Fishman and the gang really blew it on inventory. His stock sale prior to the Q2 results really smells. I'm going to let a couple of Q's roll by and see what happens. I think BIG does better as economy continues to perk-up. I'm mixed on how LW is going to contribute. @ 6x cashflow, it's too cheap, little downside from here. BIG has traded at 10X CF quite regularily in better times. Where is Ackman when we need him? Maybe Eddie will help us. LOL.

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