Financial Analysis: Big 5 Sporting Goods (NASDAQ:BGFV) and Winmark (NASDAQ:WINA)

Valuation and Earnings

This table compares Big 5 Sporting Goods and Winmark”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Big 5 Sporting Goods	$795.47 million	0.04	-$69.07 million	($3.55)	-0.40
Winmark	$81.29 million	16.69	$39.95 million	$11.23	34.04

Winmark has lower revenue, but higher earnings than Big 5 Sporting Goods. Big 5 Sporting Goods is trading at a lower price-to-earnings ratio than Winmark, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Big 5 Sporting Goods and Winmark’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Big 5 Sporting Goods	-10.03%	-29.41%	-8.82%
Winmark	49.48%	-98.49%	103.78%

Insider & Institutional Ownership

42.0% of Big 5 Sporting Goods shares are owned by institutional investors. Comparatively, 73.3% of Winmark shares are owned by institutional investors. 6.0% of Big 5 Sporting Goods shares are owned by insiders. Comparatively, 10.1% of Winmark shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Big 5 Sporting Goods has a beta of 2.03, suggesting that its stock price is 103% more volatile than the S&P 500. Comparatively, Winmark has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Summary

Winmark beats Big 5 Sporting Goods on 8 of the 11 factors compared between the two stocks.

About Big 5 Sporting Goods

Big 5 Sporting Goods Corporation operates as a sporting goods retailer in the western United States. Its products include athletic shoes, apparel, and accessories. The company also offers a selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, and winter and summer recreation, as well as home recreation. 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 trademarks comprising Golden Bear, Harsh, Pacifica, and Rugged Exposure. It also operates 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.

About Winmark

Winmark Corporation, a resale company operates as a franchisor for small business in the United States and Canada. The company franchises retail stores concepts that buy, sell and trade merchandise. It also operates middle-market equipment leasing business. In addition, the company buys and sells used clothing and accessories geared toward the teenage and young adult market under Plato’s Closet brand; and operates stores which buys and sells used and new children’s clothing, toys, furniture, equipment, and accessories primarily to parents of children ages infant to 12 years under the Once Upon A Child brand. Further, it buys, sells, trades in, and used and new sporting goods, equipment, and accessories for various athletic activities including team sports, such as baseball/softball, hockey, football, lacrosse, and soccer, as well as fitness, ski/snowboard, golf, and others under the Play It Again Sports brand; and buys and sells used women’s apparel, shoes, and accessories under the Style Encore brand. Additionally, the company buys, sells, trades in, and used and new musical instruments, speakers, amplifiers, music-related electronics, and related accessories under the Music Go Round brand. Winmark Corporation was incorporated in 1988 and is headquartered in Minneapolis, Minnesota.