Today's Dead Cat Bounce Stock Is Big Lots (BIG)

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 Big Lots ( BIG) as a "dead cat bounce" (down big yesterday but up big today) 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 $76.1 million.
  • BIG has traded 1.2 million shares today.
  • BIG is up 3.1% today.
  • BIG was down 16.6% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in BIG with the Ticky from Trade-Ideas. See the FREE profile for BIG NOW at Trade-Ideas

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 1.4%. BIG has a PE ratio of 25.0. Currently there are 10 analysts that rate Big Lots a buy, no analysts rate it a sell, and 4 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 $2.7 billion and is part of the services sector and retail industry. The stock has a beta of 1.62 and a short float of 15.2% with 3.97 days to cover. Shares are up 48.5% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Big Lots as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including 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 4.2%. Since the same quarter one year prior, revenues slightly increased by 1.2%. 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.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Multiline Retail industry average. The net income increased by 10.0% when compared to the same quarter one year prior, going from $18.13 million to $19.94 million.
  • BIG's debt-to-equity ratio is very low at 0.07 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.
  • BIG LOTS INC's earnings per share declined by 18.4% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, BIG LOTS INC reported lower earnings of $2.14 versus $2.98 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus $2.14).
  • 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.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null

More from Markets

Asia Markets Fall on Latest Tariff Threats From Trump

Asia Markets Fall on Latest Tariff Threats From Trump

Google Invests in JD.com; Comcast-Disney Battle Nears Head -- ICYMI

Google Invests in JD.com; Comcast-Disney Battle Nears Head -- ICYMI

REPLAY: Jim Cramer on Tariff Worries, Oil, Alphabet and Centene

REPLAY: Jim Cramer on Tariff Worries, Oil, Alphabet and Centene

Video: Athens Stock Exchange CEO on What's Next for Greece's Debt Woes

Video: Athens Stock Exchange CEO on What's Next for Greece's Debt Woes

Dow Drops Over 100 Points on Trade War Worries

Dow Drops Over 100 Points on Trade War Worries