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Big Lots Inc. Message Board

  • casmiata casmiata Dec 15, 2012 10:56 PM Flag

    Timing the Buy

    Here's the plan. Wait for rock bottom and the CEO's retirement. Then, wait for the new CEO. Depending on their direction, buy buy buy else, go somewhere else.

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    • Timing is certainly important- I've carefully followed and researched BIG for 6 years, and I'm invested in it for the fourth time now. BIG is unique in that it has a highly predictable price path, and that gives it a huge potential. The highs will occur in late March to mid April. The lows will occur in Nov/Dec.

      After studying it's prior history I watched it from the sidelines for two years. Then I started using a smaller investment, increased the second year. Both were profitable, so last year I increased it, but made dual mistakes- I bought too late, sold too early. I only made $26k. This year I've bought right and much heavier, extended my longs with options, and have a very specific and comprehensive exit plan. It has the potential to be an extremely profitable cycle this year, because we are moving from the worst 3Q earnings in recent history toward an all time record high quarter. This gives us a very large spread, thus a very large earnings potential. For the last three years, the high has increased about $3 per year- $41+, then $44+, and last year $47.22. That would indicate a possible $50 for March or April 2013. While the distance to cover to reach a new peak from the current price seems huge, it's not unprecedented. In 2011, the stock went up $7.50 in only one week, 2/7 to 2/14, which was prior to 4Q earnings- and this years earnings are much better, with a good chance of beating estimates to push the top end even further. It's also not necessary to set a new high record to profit well. The smallest gain between fall low and spring high in the last three years is $12, in four to five months. (Dec-April)

      The surge on the 3Q earnings day had me over 41K in the green, although I'm currently about even.
      Even if the high reaches only the $12 gain mark around $39, It still puts my gains above 150K. As it climbs beyond that between my longs and my options the gain can go well beyond 200. How well it goes will be affected by congressional action to resolve the fiscal cliff issue. However while that may dampen the cycle of gain, it will not prevent it. At this point I believe it's not a matter of if, but of how much it will make.

      While anything is possible, the odds say it's unlikely to get any better. So the time to buy is now, because the risk of loss is minimal and the potential gain is at maximum. The time to sell will be between March 15th and April 20th, the period of historical highs. There are few stocks that offer potentials like this, and every year- I'm amazed at the people who don't see it.

      Sentiment: Strong Buy

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