Christopher McCormick, a director at Big Lots (BIG), recently bought 12,000 shares. The buy increased his holdings by 31 percent, and came to a total cost of $75,480.
This marks the first insider activity since June, when two company EVPs and a director bought a combined 23,000 shares. Going further back, the company’s President and CEO was a buyer in May for 51,000 shares. And the last insider sales occurred in April 2022.
In total, Big Lots insiders own 3.5 percent of shares.
The discount retailer has lost two-thirds of its value in the past year. Revenues are off 15 percent as consumer spending has shifted from goods to services.
Plus, Big Lots has a high level of debt compared to its equity, and as that debt comes due, the company may not be able to repay given its declining revenues.
Action to take: Shares are in a short-term uptrend, and may do so through the end of the holiday season.
However, over the longer term, the company’s survivability is in doubt, making any buy here a speculative, short-term one.
For traders, the January 2024 $7.50 calls, last going for about $0.25, could see high double-digit returns if shares continue their seasonal rally into the new year. Traders should look to sell on any sign of weakness.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.