TSC Ratings' Updates: Hartford

Big Lots reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue.

This trend suggests that the performance of the business is improving. During the past fiscal year, Big Lots increased its bottom line by earning $1.58 vs. $1.02 in the prior year. This year, the market expects an improvement in earnings to $1.90. Big Lots' debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.09 is very weak and demonstrates a lack of ability to pay short-term obligations.

Net operating cash flow has significantly decreased to $41.96 million, or 57.33%, when compared to the same quarter last year. Despite a decrease in cash flow, Big Lots is still fairing well by exceeding its industry average cash flow growth rate of negative 76.57%. Big Lots' share price is down 16.77%, reflecting, in part, the market's overall decline.

Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.