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How to Trade Big Lots, Inc. (BIG) Following Earnings Results

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Following the release of its financial results, Big Lots, Inc. (NYSE:BIG)‘s opened 5% in the red and has since slightly recovered, although it is still trading more than 2% lower. The company managed to narrow its net loss to $0.03 per share in the third fiscal quarter, ended October 31, from $0.06 reported a year earlier. Excluding a special $0.02 per share expense related to the termination of a legacy pension plan, Big Lots’ net loss amounted to just $0.01 per share, which is still below the analyst estimates of a flat profit for the quarter. The revenue inched up by an annual 0.08% to $1.12 billion and was in line with the Street’s expectations. Comparable store sales went up by 2.6% in the quarter, in line with the company’s previous guidance of 2% to 3%.

For the current quarter, Big Lots, Inc. (NYSE:BIG), which operates a chain of discount stores, expects an adjusted net income between $1.95 and $2.00 per share, which translates to an increase of 11% to 14% on the year. For the full fiscal 2015, the adjusted EPS are forecasted in the range of $2.95 to $3.00, which represent an increase of 20% to 22%.

Since many investors can sometimes overlook the long-term potential of a stock and focus on short-term events, such as financial results, it’s important to assess what smart money investors think about a particular company, since they usually see the big picture and invest in a stock based on its fundamentals. Interestingly, Big Lots, Inc. (NYSE:BIG) registered a decline in interest from the funds we track at Insider Monkey, as you will see later on in this article.

If you’d ask most shareholders, hedge funds are assumed to be underperforming, old financial vehicles of yesteryear. While there are over 8000 funds in operation today, We choose to focus on the aristocrats of this group, about 700 funds. Most estimates calculate that this group of people preside over the lion’s share of the smart money’s total capital, and by tracking their first-class investments, Insider Monkey has deciphered various investment strategies that have historically outperformed the market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Now, let’s go over the recent action regarding Big Lots, Inc. (NYSE:BIG).

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