Big 5 Sporting Goods: Now What?

| About: Big 5 (BGFV)

Big 5 Sporting Goods Corp. (NASDAQ:BGFV) shares have ran up from under $6 to today's price of $13 a share in only 3 months . The company managed to pay out a 5 Cent dividend last month and they are less than 50 Cents from a new 52-week high. So, keep buying BGFV or run for the hills?

Big 5's market cap is now at $280 million, its been an incredible move for any investor that has caught the ride. Here's the recent analyst action on BGFV:

08-Jun-09 Reiterated Credit Suisse Neutral $9 → $14
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01-May-09 Upgrade Needham Hold → Buy
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01-May-09 Upgrade B. Riley & Co Neutral → Buy
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Big 5 shares have an average daily volume of 259,000 however May has really been the month that helped BGFV find a new support level.

What moved the stock?

Back on April 30th, Big 5 Sporting Goods Corp. said it expects second quarter earnings of $0.10 to $0.18 per share. The current consensus earnings estimate was $0.02 per share for the quarter ending June 30, 2009. How about them apples?

Investors came back to earth on May 5th when Big 5 reported Q1 Net Income down, but the stock has still managed to stay above $10 a share.

Big 5 Sporting Goods reported a net income of $2.8 million, or $0.13 per diluted share, for the first quarter ended March 29, 2009, compared to $4.1 million, or $0.19 per diluted share, for the first quarter of fiscal 2008.

For the first quarter of fiscal 2009, net sales were $210.3 million, compared to $212.9 million for the first quarter of fiscal 2008. Same store sales declined 4.4% for the first quarter of fiscal 2009.

Gross profit for the first quarter of fiscal 2009 was $67.1 million, compared to $71.6 million in the first quarter of the prior year.

Steven Miller, chairman, president and CEO of Big 5 Sporting Goods, said:

We are pleased with our first quarter performance in this challenging economic environment. Our operating results exceeded the upper end of our guidance range issued in late February, driven by significantly stronger than anticipated sales in March. We believe this improvement reflects the increasing attractiveness of our value proposition for consumers as well as the benefit of improved weather conditions later in the quarter.

Fellow Masters, add Big 5 to your watch list, should this stock start to pullback, its a Buy, but it may be at the mercy of day traders in the near future. It would appear that the Shorts have been moving out of Big 5, but with only a few hundred thousand shares being traded daily, this could change. We like the recent movement and believe Big 5 should hold at around $10 a share, now its up to management and investors faith. Happy Safe Investing.

Big 5 Sporting Goods Corp. $ 13.00
BGFV 0.49
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Short Interest (Shares Short) 540,600
Days To Cover (Short Interest Ratio) 1.4
Short Percent of Float 3.01 %
Short Interest - Prior 669,000
Short % Increase / Decrease -19.19 %
Short Squeeze Ranking™ 1
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Disclaimer: None of the Masters have any positions in BGFV.