Why Big 5 Sporting Goods' Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of sports retailer Big 5 Sporting Goods jumped as much as 12% in early trading before falling to a 4% gain today.

So what: The company reported fourth-quarter earnings that beat estimates on both the top and bottom lines. Revenue rose 7.4% to $243.6 million, ahead of the $226.7 million Wall Street expected. Earnings per share of $0.19 were a penny ahead of estimates.

Now what: The best news is that same-store sales grew 6.5%, a sign of a healthy retailer. The company also raised its dividend to $0.10 per share quarterly. I think shares can move higher on the strong revenue growth and dividend jump. Shares are trading at 15 times forward earnings, a reasonable price given the company's growth.

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The article Why Big 5 Sporting Goods' Shares Jumped originally appeared on Fool.com.

Fool contributor Travis Hoium and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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