Oh Boy, Another Epic Battle Between Big Lots and Short Sellers?
Big Lots (BIG) reported second-quarter earnings last week, and they were small beans. Sales rose 4% to $1.2 billion, but profit fell to $22.1 million.
Penny-pinching Americans are still seeking closeout deals, but higher markdowns hurt. And they’re either not spending or finding deals elsewhere –- Target (TGT)? Wal-Mart (WMT)? -- because Big Lots said same-store sales would probably be down for the year. Investors did not take well to the news.
That’s certainly bad, but bear in mind that the company survived the dot-com crash and its aftermath. It has also survived battles with short-sellers. Back in 2006, according to a Columbus Dispatch article (that’s not available for free online), 13% of its shares were in the hands of shorts, making it one of the most popular shorts in the S&P 500. Sure enough, it bounced back.
To be sure, the amount of shares shorted has doubled in recent months. And the most recent data says that 13% of its shares are being shorted, yet again. But hey, Amazon (AMZN) stock just hit an all-time high, and take a look at this.
BIG Profit Margin data by YCharts
That's not big, but it's bigger.
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