BGFV

Big 5’s Quiet Success Continues

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Sporting goods retailer Big 5 (click ticker for report: ) announced wonderful fourth quarter results Tuesday afternoon. Revenue increased 7% year-over-year to $243 million, slightly above consensus estimates. Earnings per share were considerably better, as the company was roughly break-even during the fourth quarter of 2011, but earned $0.19 per share in the fourth quarter of this year. For the full-year, earnings per share were 30% higher at $0.69. We profiled Big 5 in June of 2011, and shares have appreciated very nicely since. Same-store sales during the quarter were strong, jumping 6.5% from the same period a year ago. Big 5 admitted to benefiting from the post-Sandy Hook jump in guns and ammunition sales, but we also think the company … Read more

December Retail Sales Roundup

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Let’s take a look at retailers that still report monthly results. Nordstrom Nordstrom’s (click ticker for report: ) December was strong as usual, with same-store sales jumping 8.6% and total sales increasing 9.4%. We saw some weakness from the full-line Nordstrom store in November, but that trend was reversed by an 8.2% same-store sales gain in December. Nordstrom Rack continued to post fantastic results, with an 8.1% jump in same-store sales for December. All retailers benefitted from a more favorable calendar compared to 2011, but we think Nordstrom’s execution was strong regardless. Nordstrom continues to be among our favorite multi-line retailers, but we think its shares are fairly valued at current levels. Unlike other retailers, we aren’t worried about gross … Read more

Lack of Winter Weather Hits Dick’s Sporting Goods and Big 5; We’re Not Fans of Either

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Dick’s Sporting Goods (DKS) and Big 5 (BGFV) recently pre-announced dismal guidance for the fourth quarter of 2011. Though both companies cited a lack of winter weather as the main driver of poor same store sales growth, we think the stories at each company are quite different. Dick’s remains a steadily growing, well-run business focused on driving high returns on invested capital, whereas Big 5 is an inferior player focused on smaller markets that’s struggled to find its way. However, as with any investment, getting the right price remains key to our decision-making process, even for firms that may not be best-in-breed.  Risk/reward at Dick’s Sporting Goods isn’t very compelling right now. With our fair value of Dick’s at $31 per share, and … Read more

Big 5 Sporting Goods Looks Extremely Undervalued, But Proceed With Caution

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This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/277117-big-5-sporting-goods-looks-extremely-undervalued-but-proceed-with-caution If you read nothing else, consider these 3 points: Big 5 is disproportionately affected by unemployment in its key home states The company continues to grow slowly and conservatively Big 5 finds homes in niche markets that Dick’s (DKS) and The Sports Authority aren’t interested in What Big 5 does Big 5 is a small sporting goods retailer with 396 stores in 12 western states. The vast majority of its shops are concentrated in California and Nevada. They sell shoes, apparel, athletic gear, and accessories. For shoppers in bigger cities, one might find The Sports Authority or Dick’s Sporting Goods, as Big 5’s stores operate on a much smaller scale. The … Read more

2,350-2,750 on the S&P? Could the Coronavirus Catalyze a Financial Crisis?

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Image: We think a rather modest sell-off in the market to the target range of 2,350-2,750 on the S&P 500 is rather reasonable in the wake of one of the biggest economic shocks since the Global Financial Crisis. The chart above shows how far markets have advanced since 2011, and an adjustment lower to the target range of 2,350-2,750 is rather modest in such a context and would only bring markets to late 2018 levels (note red box as the target range). The range reflects ~16x S&P 500 12-month forward earnings estimates, as of February 14, adjusted down 10% due to COVID-19. When companies like Visa talk about a couple percentage points taken off of growth rates, one knows that … Read more

What Really Is the “S” in ESG Investing

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By Valuentum Analysts Back in October, we explored “Putting the Environmental in ESG” investing. In this article, let’s dig deep into the second consideration of ESG (Environmental, Social, and Governance) investing — “Social.” While there has been greater attention paid to the social impact of companies in recent years–from the industries they operate in to the ways they impact their communities–this concept is definitely not a new trend. Investors have always cared about the impact of the companies they invest in. In the past, this idea has been encapsulated in the phrase Socially Responsible Investing (SRI), which is essentially the practice of seeking out companies that have a positive social impact on society. Some even put the earliest origins of … Read more

US Congress Is Getting Ready to Pass a Massive ~$2.2 Trillion Fiscal Stimulus Bill

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Image Shown: US equities have started to recover some of their lost ground as the likelihood that the US Congress will pass a massive ~$2.2 trillion fiscal stimulus and emergency spending package, dubbed the CARES Act, has increased significantly over the past week as seen through the bounce in the SPDR S&P 500 ETF Trust (SPY). President Trump has clearly indicated that he intends to sign such a bill into law as soon as possible, with the US House of Representatives expected to take up the legislation this upcoming Friday morning on March 27. By Callum Turcan On March 25, the US Senate worked late into the night to secure a bipartisan compromise on a massive ~$2.2 trillion fiscal stimulus … Read more

Nelson: The 16 Most Important Steps To Understand The Stock Market

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A previous version of this article appeared on our website July 21, 2013. Refreshed and updated throughout, as of July 2018. By Brian Nelson, CFA After earning my MBA at the University of Chicago Booth School of Business and training stock and credit analysts from large organizations over the past decade or so, I have heard just about every question (though I admit I am still surprised by many things and remain a very humble student of the markets). I’ve also spent years perfecting the discounted cash flow process for large research organizations such as Morningstar and studied under one of the most famed aggressive growth investors of all time, Richard Driehaus. My knowledge runs the gamut from value through … Read more

There Is Milk At The Store

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This article first appeared in the September edition of the High Yield Dividend Newsletter. For more information about this publication, please see here. “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” — Winston Churchill By Brian Nelson, CFA Very few of us could have imagined that we’d witness the bull market that began on that fateful day in March 2009 that might very well mark a generational low. In 2009, major investment banks around the globe were struggling to survive, and the fallout in the mortgage markets left the banks holding paper that nobody wanted to own, let alone buy. The global financial system … Read more

Dividend Increases/Decreases for the Week Ending November 2

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Below we provide a list of firms that raised their dividends during the week ending November 2. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Aircastle (AYR): now $0.30 per share quarterly dividend, was $0.28. AllianceBernstein (AB): now $0.69 per share quarterly dividend, was $0.62. American Assets Trust (AAT): now $0.28 per share quarterly dividend, was $0.27. Apollo Global Management (APO): now $0.46 per share quarterly dividend, was $0.43. Arbor Realty Trust (ABR): now $0.27 per share quarterly dividend, was $0.25. Black Stone Minerals (BSM): now $0.37 per share quarterly dividend, … Read more