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Strategies & Market Trends : Value Investing

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To: Area51 who wrote (71668)	12/5/2022 11:58:24 AM
From: scbeachbum	of 78747

Declining revenues is lapping COVID sales for big items such as furniture. Margins are compressed due to them having higher inventory like TGT and KSS and other retailers which they've been bringing down. The real positives here that start showing up as higher same stores sales comps as they get beyond the COVID surge, but also increasing margins. Freight alone should add 400 basis points to their margins, as ocean freight has come down a lot but also as they reset traditional domestic truck/freight shipping contracts entered into last year or earlier this year when freight was high. Mill Road Capital did a very good assessment where they should be worth $55-70 a share easily. They are also selling 50+ stores that they own the real estate on, the majority of which located in California so should generate higher real estate values compared to other states. The big short interest is a bonus here if it can light up. I think Burry might be right with beaten down retail. Look at AEO it's come back, but a lot of others seems to floating near the bottom, like KSS, JOAN as well in that sector. Scroll down here and you can read the Mill Road Letter on BIG on how they should unlock value or sell the company: streetinsider.com

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