Savvy Trades and Investments

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We know BGFV is going to report a monster Q3. Earnings should be over $1/share. I think that eye-popping number should be good for some kind of pop AH. At least initially. The guidance will probably drive whether the stock can get to double digits. I don't know if they plan on giving general comments about Q4 or more specific Q4 guidance...kinda hoping for the former. Because Q3 is seasonally their best quarter by far. I think BGFV will blow away the Q4 earnings of .02/share from last year. But Q4 earnings almost sure to be down sharply on a sequential basis due to the seasonality. If they say Q4 earnings will be .30-.50/share (which would be another awesome quarter), not sure what the stock price will do. As I think there's a lot of traders in this one who don't understand the seasonality.

I'm planning to hold a small position into the numbers. BGFV not the steal it was in the $5's, but I think it's still undervalued around $8. I love the balance sheet. Q3 report tomorrow should reveal they're sitting on $2-$3/share in cash with no debt. With all that cash, they could boost the quarterly dividend or pay a hefty 1-time special dividend. Think either one would provide a further lift to the stock price.

I'll be curious to see what they say on the outlook. Some cross currents here as traffic to their website has been sliding in recent weeks:

https://www.alexa.com/siteinfo/big5sportinggoods.com#section_traffic

On the other hand, they were hiring 50 order fillers at the end of September. Which sounds VERY bullish. Gun sales should also be extremely strong ahead of the election. Plus BGFV would make an attractive acquisition candidate for a larger company looking to expand its presence on the West Coast.

We'll see what happens tomorrow afternoon. Good luck to those holding!