Somebody prepare the fainting couch. Nelson is about to do two blogs in a month. MY STARS.

Shitty retailers are pretty much my kryptonite. I just can’t help myself. They continue to be the cheapest stocks out there today. If the market’s outlook can only improve slightly from “this thing’s going to zero,” then I”m in business. Sometimes this works (I’ve made money on Hudson’s Bay twice now), and other times the investment turns into Reitmans, which continues to languish under my purchase price despite reporting pretty good numbers.

After selling Dream Office REIT and Cloud Peak Energy for nice gains, I found myself with a 39% cash position in my TFSA. That is way the hell too much, even if you think the market is long overdue for a correction. So I put a bit of it to work.

The stock

I went ahead and took a relatively small position in Hibbett Sports (NASDAQ:HIBB). It’s about 5% of my TFSA at this point, and my cost is $13.90 per share.

Canadian investors should think of Hibbett as a mini version of Sport Chek. It operates more than 1,000 stores in small and medium-sized communities across the United States. They call themselves a “sports-inspired fashion retailer,” which basically means they sell a lot of shoes, athletic wear, and so on. The average store size is about 5,000 square feet.

The stock has really gotten hammered of late. Shares peaked at just over $45 each in November, 2016. A few quarters of disappointing results later, the stock currently sits under $14.

While earnings have taken a hit, the company is still solidly profitable. Hibbett earned $2.02 per share in earnings over the last year, despite posting a loss in its most recent quarter. Free cash flow was even better; its been just over $49 million in the last 12 months. The company has less than 21 million shares outstanding.

The balance sheet is a fortress. Hibbett has no debt and a cash hoard of nearly $53 million. This gives it an EV/EBITDA ratio of just 2.5. You won’t find many stocks cheaper than that. Shares also trade comfortably under book value.

Management are doing exactly what they’re supposed to be doing when shares are this depressed. The company continues to buy back its own shares (shares outstanding went from 22.03 million to 20.75 million in the last year) while insiders buy with more gusto than a horny 1860s teen waiting for the latest copy of Chicks Showing Their Ankles from the Pony Express. FINALLY, A PONY EXPRESS JOKE ON FINANCIAL UPROAR.

Insiders have bought more than 25,000 shares at between $10 and $13.

That’s really about it. This isn’t a very complex story. It’s just an obscenely cheap stock that just needs to go from insanely cheap back to merely cheap and I’ll make a decent return. Hibbett will likely get punted from the portfolio if it gains 25 to 50%. It just isn’t the kind of stock you want to own over a decade or two.

Tell everyone, yo!