With all the talk about low price retailers like 99 Cent Only Stores and Dollar Tree, you would think Big Lots, Inc. would be in the same category of strong success stories this year, right?

Wrong.

Big Lots is down 20% in the last year while 99 Cent Only Stores and Dollar Tree are up about 40% and 30%.  Big Lots went down while even beating analyst estimates in each of the last three quarters.

Yet, Big Lots only trades at a multiple of around 10 times earnings with a solid balance sheet of no debt and nearly 98 million in cash, or about $1.20 in cash

Big Lots currently operates 1,339 retail stores in 47 states, catering to low income customers and bargain hunters.  They’re known to have deep discounts and a variety of products and have distinguished themselves as a large close-out price point public store chain which targets those who are looking for good deals.

The company is shareholder friendly.  Over the past five years management has significantly reduced the share count from nearly 120 million down toward 82 million shares.  In the last couple years, the new CEO Steven Fishman slowed down expansion plans and has been tight with overall spending.  But the company has been on record stating that they are able to support around 1800 stores, suggesting room for 34% growth in the future.

Analysts believe the company is worth around $30 and expect $1.99 in earnings this year and $2.15 next year.  They expect .17 in the upcoming quarter, which would be a modest gain over the previous year’s quarter earnings of .15.  The company is trading near $24 now, giving it a price over earnings ratio of about 12 along with its $1.20 cash.  One should expect management will go back using that cash to reduce the share count and increase earnings.  Given that Ninety Nine Cent Only Stores trades at nearly 24 times earnings and Family Dollar trades at 13 times earnings with some debt, it seems that Big Lots presents a strong reliable value.