Quick Win by the Algorithm: Big 5 Sporting Goods Corporation (NASDAQ: BGFV) Returns up to 30.60% in 1 month

[Image Source: Wikimedia]

Big 5 Sporting Goods Corporation operates as a sporting goods retailer in the western United States. The company offers athletic shoes, apparel, and accessories, as well as a selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, winter and summer recreation, and roller sports. It also provides private label items, such as shoes, apparel, camping equipment, fishing supplies, and snow sport equipment. The company sells private label merchandise under its own trademarks comprising Golden Bear, Harsh, Pacifica, and Rugged Exposure; and licensed trademarks, including Beach Feet, Bearpaw, Body Glove, Morrow, and The Realm. As of December 31, 2017, it operated 435 stores and an e-commerce platform under the Big 5 Sporting Goods name. Big 5 Sporting Goods Corporation was founded in 1955 and is headquartered in El Segundo, California.

Over the 1 month after I Know First issued its forecast on March 23, 2018, Big 5 Sporting Goods’s stock price jumped from $6.6 to $9.1 per share, outperforming the market by about 35%. What happened that drove the growth? The reason lies in the company’s following highlights:

  • Quarterly Cash Dividend
  • Store Growth & Technological Advancement
  • Effective Merchandising Support Margins

[Image Source: Yahoo Finance]


Quarterly Cash Dividend 

On March 8, 2018 Big 5 Sporting Goods Corp traded ex-dividend, for its quarterly dividend of $0.15, payed on March 23, 2018. As a percentage of BGFV’s recent stock price of $6.80, this dividend worked out to approximately 2.21%. Moreover, the company repurchased 795,718 shares for nearly $7.7 million in 2017. As of Dec 31, 2017, it had about $15.7 million remaining to be repurchased under its $25-million share buyback program.

Store Growth & Technological Advancement 
In order to improve customer service, Big 5 Sporting has been focusing on expanding its store base and introducing technological advancements. The company leveraged an extensive network of stores to effectively penetrate into target markets, directed toward producing strong sales and capturing market shares. Big 5 Sporting expects to open eight new stores and close three in 2018. I believe these moves will place it well for future growth.

Effective Merchandising Support Margins
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 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.

On March 23, 2018, I Know First issued a bullish 1 month forecast for Big 5 Sporting Goods Corporation (NASDAQ: BGFV). The forecast illustrated a signal of 44.13 and a predictability of 0.32. In accordance with the forecast, BGFV’s stock returned 30.60% over this period, highlighting the accuracy of the prediction produced by the I Know First algorithm.

Current I Know First subscribers received this bullish BGFV  forecast on March 23, 2018

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How to read the I Know First Forecast


Before making any trading decisions, consult the latest forecast as the algorithm updates predictions daily. You can use the algorithm for intra-day trading. The predictability tends to become stronger with forecasts over longer time-horizons such as the 1-month, 3-month and 1-year forecasts.