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%.
Deprival Super-Reaction Syndrome And Investing. Part four of a short series on Charlie Munger’s Human Misjudgment Revisited. Charlie Munger On Avoiding Anchoring Bias Charlie Munger On The Power Of Prices The Munger Series - Learning . . . SORRY! This content is exclusively for paying members. SIGN UP HERE If you are subscribed and having an Read More
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)