IBD pushing FIVE
"perhaps forming a base"
Silly, as it's barely gotten its toes wet as a public company.
same thing with the line about "rapid growth"
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Big Lots Thumped; Dollar General, Five Below Lead By DAVID SAITO-CHUNG, INVESTOR'S BUSINESS DAILY
Posted 05:29 PM ET
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A huge sell-off in shares of Big Lots (BIG) on Thursday reaffirmed why trying to buy the laggard stock in a leading industry group simply does not pay.
Big Lots, formerly the enormously successful discount store chain Pic 'N' Save, plunged 22% in easily the heaviest volume so far in 2012. A total of 16 million shares changed hands, more than a quarter of the stock's 61 million-share float.
The Columbus, Ohio-based retailer reported its third drop in profit in the past four quarters. Earnings in the July-ended fiscal second quarter sank 31% to 36 cents a share, 12% below the Thomson Reuters consensus estimate, despite a 4% lift in sales to $1.22 billion.
Earnings fell 26% in the October fiscal third quarter last year and 3% in the April first quarter.
Company officials noted on a conference call that sales of furniture, home goods and seasonal items fell vs. the year-ago quarter at stores open at least 15 months. CEO Steven Fishman said the company will test the acceptance of food stamps. It's also brought back John Martin as chief of merchandising.
Investors who use charts would have already known that the company was struggling. On March 29, the stock gapped down nearly 5% in volume that was more than triple average. That followed several days of new highs in low volume, a key sell signal after a long run-up.
On April 24, Big Lots collapsed 24%, closing well below its 50- and 200-day moving averages, after it issued negative sales guidance.
Within the five-member Retail-Discount & Variety group, Big Lots showed the weakest RS Rating (prior to Thursday's decline) at 52.
The best RS rank at 89 belongs to new issue Five Below (FIVE). Its stores sell items for $5 or less and targets teens. The stock has doubled from its IPO at 17. It's pulled back recently, perhaps hatching a new base.
Five Below is growing rapidly. Earnings rose 131% to 30 cents a share in fiscal 2012 ended in January. Sales have zoomed 350% from $66 million in fiscal 2008 to $297 million in fiscal 2012.
Dollar General (DG) (EPS 97, RS 87) cut its decline Thursday and is just 11% off its high. Dollar Tree (DLTR) (99, 78) is working on a new base and trying to stay abreast of its rising 200-day moving average. |
