Disappointing Discount Retailer Sporting Cheap Options

Shares of Burlington have seen a 50% decline year-to-date

facebook twitter linkedin

Burlington Stores, Inc. (NYSE:BURL) is an American off-price retailer. BURL’s stores offer in-season, fashion-focused merchandise at up to 60% discounts. The discount retailer's product offering includes women’s apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts, and coats. At last check, BURL is trading down 2.6% at $139.78.

Burlington stock has decreased about 52% over the past 12 months and in 2022. The equity has also seen a 5% decline over the past month, and is currently trading just 8% off its June low of $133.28. Nonetheless, Burlington stock maintains a high valuation at a forward price-earnings ratio of 34.97 and a price-sales ratio of 1.09.

In addition, BURL holds a weak balance sheet with $627.05 million in cash and $4.57 billion in total debt, providing very little security for long-term investors. Short interest has been falling, down 14.6% during the most recent reporting period. This accounts for over 5% of the stock's total available float, and would take short sellers just over three days to buy back. 

Regardless, options are looking affordable. This is per the stock's Schaeffer's Volatility Index (SVI) of 47%, which ranks in the 34th percentile of its annual range. In simpler terms, options traders are pricing in relatively low volatility expectations at the moment.


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners