Stock of the day 28/05/2015 – Big Lots Inc

After decidedly mixed fortunes in the last 8 months, variety discount store Big Lots Inc will be hoping to get back on the right track with its first quarter 2015 earnings release on Friday.

An impressive 2014, which saw Big Lots start the year at $32.06 and hit a high of $51.74 at the end of November, came to a crashing halt at the start of December as the stock fell by around 20% in a few days after disappointing Q3 2014 results. Things have been better in 2015. After opening the year at $40.03 Big Lots managed to jump back to $51.13 by the start of March. However, from then on (slower) declines set in once more, and the company is currently trading at $45.30.


(Source: IT-Finance.com 28/05/2015)

Whilst its third quarter results saw a 0.2% increase in revenue to $1.107 billion, Big Lots’ operating loss widened to $4.06 million, a 41.6% increase, an issue exacerbated by a 0.4% increase in cost of sales in the same period. However, things improved for its fourth quarter results, announced at the start of March, which saw revenue of $1.59 billion alongside earnings per share of $1.76, leading to its 2015 peak price of $51.13.

For this first quarter analysts are expecting earnings per share of $0.58 joined by revenue of $1.28 billion, with investors likely to pay special attention to the company’s same store sales and any progress on its movement towards e-commerce. Perhaps the biggest thing Big Lots has going for it is the fact that it has implemented a robust share buyback scheme in the last few years, with $250 million in 2014 likely being joined by another $200 million this year. This has left analysts bullish on the stock, giving Big Lots a consensus rating of ‘buy’ with an average target price of $52.07.

Thursday’s stock news:

Following its full year results, Tate & Lyle suffered its latest significant fall, dropping to its lowest price since February’s profit warning. The catalyse for these losses was a 28% decline in profit before tax, a 11% fall in sales and a 29% drop in earnings per share. To top it off, the company warned that it expects no real uptake in the next 12 months as it tries to restructure its business.

Synergy Health continued to suffer throughout Thursday, if not quite as dramatically as it has done over the past two days, as investors continue to worry over the likelihood of a takeover by the Steris Corporation. The Federal Trade Commission is reportedly displeased by tax reasons behind Steris’ move, and could stand in the way of the rumoured $1.9 billion deal.

With his beloved Newcastle avoiding relegation last weekend, Mike Ashley got more good news this week as Sports Direct International revealed its underlying pretax profit and EPS are both ahead of forecasts, whilst at £380 million its EBITDA is in line with market expectations. This lead to a near 5% increase in its stock price as the day went on.