Big Lots, Inc. (BIG) Looks Appealing on Innovative Management

Strategy shifts
Big Lots, Inc. (NYSE:BIG) management has been testing frozen and refrigerated food items in five test markets, and seeing encouraging early results. While this isn’t much cause for celebration, it is indicative of management exploring new areas, especially since some of the older, less-profitable segments are proving stale.

New CEO David Campisi has acted swiftly in his first 100 days in the captain’s seat. In the earnings call, he outlined a new campaign to get back to customer service and satisfaction — an area in which he believes the stores have fallen flat. Campisi is clearly headed toward service and merchandising shifts, along with new marketing campaigns and an attempt to reach out beyond the core customer.

As mentioned above,  Big Lots, Inc. (NYSE:BIG) trades at less than 11 times forward earnings. The company also trades at an EV/EBITDA of just 5.35. While the stock has gained nicely over the past year — up nearly 16% — there is certainly still room to run in terms of valuation.

If management is successful in turning around the brand and convincing Wall Street that Big Lots is a growing entity, investors can expect multiple expansion along with sales growth — making this company a potentially attractive retail pick.

The article Big Lots Looks Appealing on Innovative Management originally appeared on Fool.com and is written by Michael Lewis.

Fool contributor Michael Lewis has no position in any stocks mentioned. The Motley Fool owns shares of Big Lots.

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