We came across a bullish thesis on Ollie’s Bargain Outlet Holdings, Inc. on TQI capital (Typical quality investor)’s Substack by TQI capital. In this article, we will summarize the bulls’ thesis on OLLI. Ollie’s Bargain Outlet Holdings, Inc.'s share was trading at $107.26 as of January 29th. OLLI’s trailing and forward P/E were 29.71 and 23.81 respectively according to Yahoo Finance. Kohl's (NYSE:KSS) Ollie's Bargain Outlet Holdings, Inc. operates as a retailer of closeout merchandise and excess inventor ...

Group 1 - The article highlights Ollie's Bargain Outlet (OLLI) as a countercyclical discount store that benefits when other retail stores face challenges [1] - The company is positioned to gain opportunities during economic downturns, as it thrives when competitors struggle or go out of business [1] Group 2 - The author has a background in writing about restaurants, retailers, and food manufacturers, focusing on long-term investment opportunities and valuation metrics [1]

Company Overview - Ollie's Bargain Outlet specializes in discounted brand name merchandise and operates over 600 stores across 34 states, targeting value-focused shoppers [1][6][9] - The company reported a revenue of $2.54 billion and a net income of $223.60 million for the trailing twelve months (TTM) [4] Recent Transaction - Congress Asset Management sold 670,615 shares of Ollie's Bargain Outlet during the fourth quarter, valued at approximately $80.86 million based on quarterly average pricing [2][3] - Following the sale, Ollie's represented 0.68% of Congress Asset Management's reportable U.S. equity assets under management (AUM) [3][11] Performance Metrics - As of the latest report, Ollie's shares were priced at $118.49, reflecting a 13% increase over the past year, although it underperformed compared to the S&P 500's nearly 18% gain [3] - In the third quarter of fiscal 2025, Ollie's net sales increased by 18.6% to $613.6 million, and adjusted earnings per share (EPS) surged by 29.3% to $0.75 [10] Strategic Insights - The sale by Congress Asset Management indicates a recalibration of investment strategy rather than a complete retreat from the company, as Ollie's remains a holding albeit at a reduced percentage of AUM [7][11] - The company has opened a record 32 stores in the quarter and raised its full-year revenue guidance to $2.65 billion, with adjusted EPS projected between $3.81 and $3.87 [10]

Core Insights - The investment approach focuses on identifying businesses with potential for long-term growth and significant terminal value generation [1] - Emphasis is placed on understanding core business economics, including competitive advantages, unit economics, reinvestment opportunities, and management quality [1] - The goal is to generate long-term free cash flow and create shareholder value through fundamental research in sectors with strong secular growth trends [1] Investment Philosophy - The investor is self-educated and has been active in the investment field for 10 years, currently managing personal funds sourced from friends and family [1] - The motivation for sharing insights on platforms like Seeking Alpha is to provide valuable analysis and receive feedback from other investors [1] - The focus is on delivering analytical and accessible content that highlights the drivers of long-term equity value [1]

Core Insights - The investment approach focuses on identifying businesses with potential for long-term growth and significant terminal value generation [1] - Emphasis is placed on understanding core business economics, including competitive advantages, unit economics, reinvestment opportunities, and management quality [1] - The goal is to generate long-term free cash flow and create shareholder value through fundamental research in sectors with strong secular growth trends [1] Investment Philosophy - The investor is self-educated and has been active in the investment field for 10 years, currently managing personal funds sourced from friends and family [1] - The motivation for sharing insights on platforms like Seeking Alpha is to provide valuable analysis and receive feedback from other investors [1] - The focus is on delivering analytical and accessible content that highlights the drivers of long-term equity value [1]

Core Viewpoint - Loop Capital upgraded Ollie's Bargain Outlet Holdings, Inc. from Hold to Buy and increased its price target to $135.00, resulting in a more than 3% increase in shares on Monday [1] Group 1: Upgrade and Price Target - The upgrade was influenced by a recent store tour with company leadership and district management, which reinforced confidence in Ollie's ability to achieve positive comparable sales growth in fiscal 2026 [2] - The new price target of $135.00 is based on a valuation of 30.1 times projected fiscal 2026 diluted earnings per share, aligning with comparable retailers [3] Group 2: Key Drivers for Growth - Three key drivers identified for Ollie's growth include: 1. The ongoing liquidation of Big Lots, creating a steady pipeline of attractive store locations and supplier opportunities [2] 2. The expanding presence of consumables, leading to more frequent store visits [2] 3. A more data-driven and disciplined management approach compared to previous leadership [2] Group 3: Fiscal Estimates - Loop Capital raised its fourth-quarter fiscal 2025 estimates, citing strong positioning for the holiday season as consumers shift to lower-priced alternatives amid an uncertain U.S. macroeconomic environment [3]

Group 1 - Ollie's Bargain Outlet Holdings Inc shares increased by 2% to $110.11 following an upgrade from Loop Capital to "buy" and a price target increase to $135 from $130, citing underestimated sales potential and strategic advantages for the discount retailer [1] - The stock has been on a downward trend since mid-September, recently falling below its 200-day moving average and experiencing five consecutive weeks of negative performance, currently hovering around breakeven for 2025 [2] - Short interest represents 7.5% of the stock's available float, indicating over four days' worth of pent-up buying power, which could lead to a potential lift in shares, alongside an oversold relative strength index (RSI) of 25 suggesting a short-term bounce [3] Group 2 - The options market for Ollie's Bargain Outlet is showing reasonably priced premiums, with a Schaeffer's Volatility Index (SVI) of 32% ranking in the low 6th percentile of its annual range, indicating low volatility expectations among options traders [4]

Upgrades - Bradesco BBI upgraded Volaris (VLRS) to Outperform from Neutral with a price target of $12 [2] - Loop Capital upgraded Ollie's Bargain Outlet (OLLI) to Buy from Hold with a price target of $135, increased from $130, citing underestimated comp potential in fiscal 2026 [2] - Raymond James upgraded Cummins (CMI) to Outperform from Market Perform with a price target of $585, noting a change in sentiment for the second half of 2026 despite a cautious near-term outlook [3] Downgrades - Janney Montgomery Scott downgraded Heritage Commerce (HTBK) to Neutral from Buy with a fair value estimate of $14 following an acquisition agreement with CVB Financial (CVBF) [4] - William Blair downgraded Clearwater Analytics (CWAN) to Market Perform from Outperform without a price target after a take-private deal at $24.55 per share [5] - Raymond James double downgraded Sealed Air (SEE) to Market Perform from Strong Buy without a price target, indicating reduced odds for a topping bid after the conclusion of the "go-shop" period [6] - Citi downgraded Amicus (FOLD) to Neutral from Buy with a price target of $14.50, down from $17, after BioMarin announced an acquisition for $4.8 billion or $14.50 per share [6] Initiations - Wells Fargo initiated coverage of Arcellx (ACLX) with an Overweight rating and a price target of $100, viewing its anti-cel as a future pillar in multiple myeloma treatment [7] - Jefferies initiated coverage of BlackSky (BKSY) with a Buy rating and a price target of $23, projecting sales to double to $211 million by 2028 [7] - BTIG initiated coverage of Invivyd (IVVD) with a Buy rating and a price target of $10, highlighting its effective antibody production [7] - Jefferies initiated coverage of Relmada Therapeutics (RLMD) with a Buy rating and a price target of $9, noting a transformation towards oncology and neuro pipeline [7] - Seaport Research initiated coverage of MasterCraft Boat (MCFT) with a Neutral rating and no price target, expressing caution due to competitive pressures in the marine industry [7]

Core Viewpoint - Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) is identified as a preferred stock by RBC for 2026, benefiting from favorable economic conditions and industry trends [1][2]. Company Expansion and Performance - RBC anticipates Ollie's to open approximately 75 new stores by 2026 and improve gross margins through enhanced supply chain management [2]. - Citi has adjusted its price target for Ollie's to $141 from $150 while maintaining a 'Buy' rating, whereas Craig-Hallum raised its target to $157 from $156, also keeping a 'Buy' rating [3]. Analyst Ratings and Market Sentiment - As of December 12, 63% of analysts have a 'Buy' or equivalent rating for Ollie's, with a median price target of $141, indicating a potential upside of 23.78% [4].

Group 1: Company Analysis - Apple Inc continues to dominate the market with strong sales performance and innovative product launches, contributing significantly to its revenue growth [1] - Ollie's Bargain Outlet Holdings, Inc. has shown resilience in the retail sector, with a notable increase in same-store sales, indicating effective inventory management and customer engagement strategies [1] - Liberty All Star Growth Closed Fund has experienced fluctuations in its net asset value, reflecting broader market trends and investor sentiment [1] Group 2: Market Trends - The overall market analysis indicates a shift towards value investing, with investors favoring companies with strong fundamentals and growth potential [1] - Retail sector dynamics are evolving, with discount retailers like Ollie's gaining traction amid economic uncertainties, highlighting changing consumer behavior [1] - The investment landscape is increasingly influenced by macroeconomic factors, including interest rates and inflation, impacting fund performance and stock valuations [1]