BGFV has doubled in value in 2021
Earlier this week, we highlighted the small-cap put buying that has been on the rise lately. Honing in on a specific small cap name, Big 5 Sporting Goods Corporation (NASDAQ:BGFV) is up 104.5% in 2021, but has taken a 12.6% haircut this quarter. As the calendar turns to 2022, how should investors proceed with the specialty retailer?
BGFV's 320-day moving average would be one to watch going forward, a trendline that's been breached only once in the last year. Last seen at $19.53, the shares are a ways off their Nov. 12 record peak of $46.29. A short squeeze is in play though, considering 28% of the stock's total available float is sold short.
From a fundamental point of view, Big 5 Sporting Goods has grown its revenues 19% and BGFV has increased its net income by $107 million since fiscal 2018. Big 5 Sporting Goods’ trailing 12-month rolling revenues and net income are also up 13% and 85%, respectively, since fiscal 2020.
As potentially the most attractive feature of BGFV, the sporting goods stock offer a forward dividend of $1.00 with an incredibly high dividend yield of 5.10%. On top of that selling point, Big 5 Sporting Goods stock also has an amazing valuation with a price-earnings ratio of 4.26 and a price-sales ratio of 0.39, making BGFV an intriguing option for dividend investors looking for high profit potential.
Meanwhile, data suggests it could be a good time for options traders to target short-term BGFV options contracts. For starters, the security has a Schaeffer's Volatility Index (SVI) of 86%, which ranks in the low 15th annual percentile -- suggesting volatility expectations are unusually low right now. Moreover, the tech issue has a Schaeffer's Volatility Scorecard (SVS) of 80, revealing it's shown a tendency to make bigger-than-expected moves over the past year, compared to what the options market has priced in.