viquicesi1983.netlify.com

© Provided by The Motley Fool Why Big Lots Stock Fell on Friday

The Big Lots Inc (NYQ:BIG) share price is currently trading at 34.57. But given the volatile market conditions and uncertain economic outlook, the question now is what the future holds for it. To try and predict where the Big Lots Inc price will head next, it's worth knowing its strengths and potential weaknesses. The good news is that it stacks up well against some important financial. Big Lots stock was falling Monday morning, following a double downgrade from Bank of America Merrill Lynch, which warned that the company’s store remodeling won’t be enough to lift the discounter. Why Big Lots Stock Was Down Big on Friday. Jon Quast Aug 28, 2020. The stock is up big in 2020 which may be sparking some profit-taking, but it's a questionable move given the company's results.

What happened

Shares of discount-retailer Big Lots(NYSE: BIG) fell on Friday after the company reported results for the third quarter of 2020. It's actually hard to find much to nitpick from the third-quarter report, but perhaps management's lack of forward guidance was enough to shake out low-conviction investors. As of 12:30 p.m. EST, Big Lots stock was down 9%.

Big Lots Stock Symbol

So what

In Q3, Big Lots reported revenue of almost $1.4 billion, up 18% year over year. On the bottom line, the company reported net income of $30 million. This breaks down to $0.76 in earnings per share (EPS), ahead of guidance. Management had guided for EPS of $0.50 to $0.70. Going forward sales look strong -- it put holiday items out early and that seems to be paying off. That said, management stopped short of giving official forward guidance.

Considering Big Lots stock's incredible run so far, lack of forward guidance could be enough for some investors to book their gains and move on. That's because it's likely many Big Lots investors are new. The stock traded in deep value territory at the bottom of the market crash and many likely bought into this cheap stock somewhere along the ride back up. Since the bottom, the stock is up over 300%.

Now what

Big Lots today also declared a dividend of $0.30 per share, which puts the current dividend yield over 2%. That's a good dividend. And the stock trades at a trailing price-to-earnings ratio under three. That's a really low valuation. Remember, the company is in the middle of a strategic turnaround. Given the company's appealing valuation metrics, it's worth dissecting the business plan to see if this could be a cheap turnaround stock to buy.

Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

SPONSORED:

10 stocks we like better than Big Lots

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Big Lots wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Lisa Bachmann Big Lots

*Stock Advisor returns as of November 20, 2020