Will Big Lots Inc. (BIG) Disappoint This Earnings Season?

reminiscences of a stock operator pdf

Big Lots Inc. (BIG) is slated to report third-quarter fiscal 2013 results on Dec 6, 2013. In the previous quarter, it posted a positive surprise of 24.0%. Let us see how things are shaping up for this announcement.

Factors in the Past Quarter

Big Lot’s second-quarter fiscal 2013 earnings beat was mainly driven by the company’s robust performance in Canada. Sales at its Canadian operations increased 8.2% to $37.9 million, while comparable-store sales registered growth of 8.3%.

Earnings Whispers?

Our proven model does not conclusively show Big Lots as likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: ESP for Big Lots is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stands at a loss of 8 cents.

Zacks Rank #2 (Buy). Big Lots’ Zacks Rank #2 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings surprise call. We caution against stocks with Zacks #4 and 5 Ranks (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:

Five Below, Inc. (FIVE) with Earnings ESP of 25.0% and Zacks Rank #2 (Buy)

The Kroger Co. (KR) with Earnings ESP of 1.89% and Zacks Rank #3 (Hold)

Costco Wholesale Corporation (COST) with Earnings ESP of 0.97% and Zacks Rank #3 (Hold)

BIG LOTS INC (BIG): Free Stock Analysis Report

COSTCO WHOLE CP (COST): Free Stock Analysis Report

FIVE BELOW INC (FIVE): Free Stock Analysis Report

KROGER CO (KR): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

For exclusive info on hedge funds and the latest news from value investing world at only a few dollars a month check out ValueWalk Premium right here.

Multiple people interested? Check out our new corporate plan right here (We are currently offering a major discount)

About the Author

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1986 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1986-2011 and were audited and attested by Baker Tilly, an independent accounting firm.

Be the first to comment on "Will Big Lots Inc. (BIG) Disappoint This Earnings Season?"

Leave a comment

Your email address will not be published.