Big Lots ( BIG ) is the largest broad-line closeout retailer with an annual turnover of more than $4 billion. The closeout format gives it an edge over traditional discount retailers as customers are offered merchandise assortments at very low prices. The company's business model is gaining strength. The retailer now expects EPS to grow at a CAGR [compound annual growth rate] of 12% to 16% over the next three years. We think the company's focus on closing underperforming stores, reducing operating expenses, and improving merchandise content are steps in the right direction. Moreover, the company's in-store initiatives and testing of smaller prototype stores will help drive traffic. We have a long-term Outperform recommendation on the stock. Our target price of $42.00, 15.4X 2010 EPS, reflects this view. Zacks Investment Research