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Are Investors Undervaluing Big Lots (BIG) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Big Lots (BIG). BIG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.99. This compares to its industry's average Forward P/E of 25.46. BIG's Forward P/E has been as high as 12.42 and as low as 6.94, with a median of 8.83, all within the past year.

Investors will also notice that BIG has a PEG ratio of 0.80. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BIG's industry currently sports an average PEG of 2.37. Over the past 52 weeks, BIG's PEG has been as high as 3.78 and as low as 0.63, with a median of 1.04.

Value investors will likely look at more than just these metrics, but the above data helps show that Big Lots is likely undervalued currently. And when considering the strength of its earnings outlook, BIG sticks out at as one of the market's strongest value stocks.


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