Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Big Lots as such a stock due to the following factors:
- BIG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $42.1 million.
- BIG has traded 1.5 million shares today.
- BIG traded in a range 229.4% of the normal price range with a price range of $2.05.
- BIG traded above its daily resistance level (quality: 528 days, meaning that the stock is crossing a resistance level set by the last 528 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on BIG:
Big Lots, Inc., through its subsidiaries, operates as a broadline closeout retailer in the United States. The stock currently has a dividend yield of 1.5%. BIG has a PE ratio of 22.3. Currently there are 10 analysts that rate Big Lots a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Big Lots has been 1.0 million shares per day over the past 30 days. Big Lots has a market cap of $2.5 billion and is part of the services sector and retail industry. The stock has a beta of 0.85 and a short float of 10.5% with 5.56 days to cover. Shares are up 37.2% year-to-date as of the close of trading on Thursday.
rates Big Lots as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- BIG's revenue growth has slightly outpaced the industry average of 7.5%. Since the same quarter one year prior, revenues slightly increased by 1.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 69.75% to $102.17 million when compared to the same quarter last year. In addition, BIG LOTS INC has also vastly surpassed the industry average cash flow growth rate of -79.52%.
- BIG's debt-to-equity ratio is very low at 0.06 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 0.11 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Multiline Retail industry. The net income has significantly decreased by 89.6% when compared to the same quarter one year ago, falling from $32.33 million to $3.35 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Multiline Retail industry and the overall market, BIG LOTS INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Big Lots Ratings Report.