A Big Opportunity in Big Lots

Over the past year, operational mishaps caused discount retailer to separate itself from its peers - in a bad way. While names such as Family Dollar (FDO) and Dollar Tree (DLTR) were climbing higher, shares in Big Lots (BIG) were getting hammered. Since that time, as the economy has started to show signs of improvement, these discount "any economy" retailers have all seen their shares slide back.

But the Big Lots share discount could perhaps be as good as the discounted products its sells, if not better. Trading at $31 and change, the company is being valued at $1.8 billion or 11x trailing earnings. With a modest amount of net debt, or an enterprise value of $1.9 billion, Big Lots is currently being valued at 5x enterprise value/earnings before interest, taxes, depreciation and amortization. The similar multiple for Family Dollar is 8.3; for Dollar Tree, it's 9.7....280 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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