DKS

Lack of Winter Weather Hits Dick’s Sporting Goods and Big 5; We’re Not Fans of Either

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Dick’s Sporting Goods (DKS) and Big 5 (BGFV) recently pre-announced dismal guidance for the fourth quarter of 2011. Though both companies cited a lack of winter weather as the main driver of poor same store sales growth, we think the stories at each company are quite different. Dick’s remains a steadily growing, well-run business focused on driving high returns on invested capital, whereas Big 5 is an inferior player focused on smaller markets that’s struggled to find its way. However, as with any investment, getting the right price remains key to our decision-making process, even for firms that may not be best-in-breed.  Risk/reward at Dick’s Sporting Goods isn’t very compelling right now. With our fair value of Dick’s at $31 per share, and … Read more

Strong Third Quarter for Dick’s Sporting Goods; Maintaining Our Fair Value

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By all accounts, Dick’s Sporting Goods (DKS) reported a strong third quarter. Same store sales were up 4.1%, earnings increased to $0.33 a share on a GAAP basis, up nearly 170% year-over-year. Additionally, management raised guidance to $2.01-$2.03 per share from $1.94-$1.96, although we don’t think the guidance raise is very surprising. Gross margins were also up about 125 basis points, which is likely to continue into the fourth quarter. We are maintaining our $30 fair value estimate. Dick’s continues to ride tailwinds in footwear and athletic apparel to higher revenue growth. The company also opened 19 new stores and posted strong comps in its burgeoning e-commerce business (16.8%). However, Golf Galaxy continues to post lackluster results as it reported … Read more

Dick’s Sporting Goods Appears Slightly Overvalued

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The ever expanding Dick’s Sporting Goods looks fairly valued   With the recent tremendous success that we’ve seen in Under Armour (UA), Nike (NKE), and Adidas, it’s natural to look at the company bringing these products to the consumer. Not surprisingly, it’s a pretty competitive landscape, and we’re initiating coverage of the biggest player, Dick’s Sporting Goods (DKS) at a fair value of $30 per share. We think the market may be a little too enthusiastic about the company’s growth prospects.   Riding the sports apparel tailwind   If any company has benefited from the strength in Under Armour, it’s been Dick’s. The company accounts for over 30% of UA sales, and with its premium brand name, has been able … Read more

Big 5 Sporting Goods Looks Extremely Undervalued, But Proceed With Caution

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This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/277117-big-5-sporting-goods-looks-extremely-undervalued-but-proceed-with-caution If you read nothing else, consider these 3 points: Big 5 is disproportionately affected by unemployment in its key home states The company continues to grow slowly and conservatively Big 5 finds homes in niche markets that Dick’s (DKS) and The Sports Authority aren’t interested in What Big 5 does Big 5 is a small sporting goods retailer with 396 stores in 12 western states. The vast majority of its shops are concentrated in California and Nevada. They sell shoes, apparel, athletic gear, and accessories. For shoppers in bigger cities, one might find The Sports Authority or Dick’s Sporting Goods, as Big 5’s stores operate on a much smaller scale. The … Read more

Stumbles in Europe, Footwear, and Rising Input Costs Could Keep Shares of Under Armour at Bay

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This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/277905-under-armour-solid-company-but-shares-are-significantly-overvalued  We wanted to provide subscribers with our thoughts on Under Armour (UA). Although we expect the company to follow Nike’s excellent results and post solid performance in its second quarter, the shares look significantly overvalued to us in the $75-$80 range. The risk-reward balance is not in investors’ favor at these levels. Apparel Remains Strong… If we can gather anything pertinent about Under Armour from Nike’s (NKE) earnings released Monday, we can see that athletic apparel, specifically in North America, is on fire. Year-to-date, Nike’s North American apparel sales are up 21%, including a second-quarter surge of 28%. This is consistent with the apparel growth we’ve seen at Adidas (ADDYY.PK) and Lululemon (LULU). Under Armour, with a smaller base than Nike, … Read more

Dividend Increases/Decreases for the Week August 27

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Below we provide a list of firms that raised their dividends during the week ending August 27. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Alpine Income Property Trust (PINE): now $0.255 per share quarterly dividend, was $0.250. Altria (MO): now $0.90 per share quarterly dividend, was $0.86. Atlanticus Holdings Corporation 7.625% PER PFD B (ATLCP): now $0.4977 per share quarterly dividend. Avnet (AVT): now $0.24 per share quarterly dividend, was $0.22. Bank of Hawaii (BOH): now $0.70 per share quarterly dividend, was $0.67. bebe stores (BEBE): now $0.15 per share … Read more

How to Think About Corporate Tax Reform

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Dividend Increases/Decreases for the Week Ending February 16

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Below we provide a list of firms that raised their dividends during the week ending February 16. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week AbbVie (ABBV): now $0.96 per share quarterly dividend, was $0.71. AllianceBernstein (AB): now $0.84 per share quarterly dividend, was $0.51. Applied Industrial Technologies (AIT): now $0.30 per share quarterly dividend, was $0.29. Apollo Global Management (APO): now $0.66 per share quarterly dividend, was $0.39. Arch Coal (ARCH): now $0.40 per share quarterly dividend, was $0.35. Auburn National (AUBN): now $0.24 per share quarterly dividend, was $0.23. … Read more