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Big 5 Sporting (BGFV) Looks Promising: Time to Buy the Stock


You must grab the opportunity by adding Big 5 Sporting Goods Corp. BGFV to your portfolio as the stock looks quite promising now. Also, the company’s impressive growth strategies and solid financials underscore strength in its operations, further highlighting its future prospects. Notably, this Zacks Rank #2 (Buy) stock, with a long-term earnings growth rate of 12% and a VGM Score of “B”, has jumped over 58% in the past three months. Moreover, the company's share price is hovering close to its 52-week high of $16.16.

BIG 5 SPORTING Price and Consensus

BIG 5 SPORTING Price and Consensus | BIG 5 SPORTING Quote

What’s Driving the Stock?

Big 5 Sporting leverages an extensive network of stores to effectively penetrate its target markets, directed toward generating healthy sales. Also, the company remains focused on technological advancements to enhance services for its patrons. We believe that these moves place it well for future growth.

Additionally, Big 5 Sporting’s unique strategy of offering exclusive branded merchandise sourced from leading manufacturers provides it with a competitive edge over its rivals in a cut-throat specialty retailing industry. Further, the company leverages its strong vendor relationships to source overstock and closeout merchandise at substantial discounts. This helps it achieve the dual objectives of boosting gross margin while offering compelling value to customers.

Moreover, it boasts a strong balance sheet, which offers it the financial flexibility to drive future growth. Also, the company remains committed toward enhancing shareholder returns in the form of dividend payouts and share buybacks.

Further, Big 5 Sporting’s solid second-quarter 2016 results and a strong start to the third quarter encouraged management to provide an upbeat third-quarter outlook. For the third quarter, the company expects comparable-store sales to increase in the mid to high single-digit range. It also envisions earnings in the range of 23–30 cents a share. However, promotional challenges related to industry consolidation are expected to linger in the future. Nonetheless, estimates have been trending upward ahead of the third-quarter earnings release, clearly indicating that analysts covering the stock are optimistic about its performance.

Over the past 7 days, the Zacks Consensus Estimate of 30 cents and 57 cents for the third quarter and 2016 has increased 2 cents and 3 cents, respectively.

From the above analysis, it is apparent that Big 5 Sporting deserves a place in your portfolio.

Other Stocks to Consider

Some favorably ranked stocks in the same industry include Dick's Sporting Goods Inc. DKS, Marinemax Inc. HZO and ULTA Salon, Cosmetics & Fragrance, Inc. ULTA.

Dick's Sporting Goods, with a long-term earnings growth rate of 12.3%, has surged nearly 61% year to date. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Marinemax, a Zacks Rank #2 stock, has jumped over 37% in the past one year. The stock has a long-term earnings growth rate of 30%.

ULTA, also carrying a Zacks Rank #2, has gained nearly 44% in the past one year. Moreover, it has a long-term earnings growth rate of 19.5%.

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