Big Lots Earnings Show Growth -- What About the Stock?

Posted Aug 25th 2010 9:00AM by Steven Mallas
Filed under: Earnings Reports, Wal-Mart (WMT), Target Corp. (TGT)

Big Lots (BIG) has had something of a tough time after peaking in April. The one-year chart is a sad graphic for shareholders to look at. As can be seen, the stock, which had previously displayed a significant amount of strength, is now in retreat mode. The attacking bears on Wall Street can be a scary force, to be sure.

On Tuesday, shares of the retailer were off by 2.8%; at the end of the session, they settled at $30.86. That's still far off from the 52-week low of $23.04.

I doubt that means much to investors who purchased at higher prices. What might be more meaningful is the latest earnings report. The numbers weren't bad.

Big Lots made 48 cents per share in the second quarter. That was a nice increase; last year at this time, the company produced 34 cents per share. Wasn't much of a beat, though; analysts were projecting 47 cents per share. Same-store sales posted a decent gain of 3.8%.

I think the chain is holding up well on a fundamental basis. Technically, the stock isn't in favor like it once was, that much is obvious. In fairness, though, the whole market is full of negative sentiment.

Big Lots, which competes with Target (TGT) and Wal-Mart (WMT), could continue to head lower. Shorter-term players may not find what they're looking for with this equity, but longer-term participants who are willing to dollar-cost-average might want to check the business out.

Disclosure: I don't own any company mentioned; positions can change without notice.