Dick's Sporting Goods (DKS) Splits - Wait a week to buy

Submitted by Ted Gottsegen on Mon, 10/22/2007 - 17:19

Tags:

Financial News

Dick's Sporting Goods (NYSE:DKS) shares split 2:1 this morning and now that shares are in the $32 range vs. $70 we're interested. Tack on a downgrade last week by Robert W. Baird & Co saying the recent run-up in the stock price and warm weather that may hurt Q3 results could push shares down even further.

Analyst J. David Cumberland said shares of the sporting goods retailer have risen over 22 percent since the company's strong second-quarter report. He downgraded the stock to "Neutral" from "Outperform."

Dick's Sporting Goods Inc. (DKS)

In August, Dick's said second-quarter earnings rose 87% on higher sales from both existing and new stores.

Financials

(In millions of USD)

Income Statement	Quarterly (Aug '07)	Annual (2007)	Annual (2006)
Total Revenue	1,013.42	3,114.16	2,624.99
Gross Profit	298.66	896.70	737.64
Operating Income	83.19	197.71	132.75
Net Income	47.93	112.61	72.98

Cumberland warned, however, that mild weather conditions hurt recent sales of cold weather merchandise for many retailers. Cumberland said temperatures have been six degrees above average in Dick's markets over the past four weeks, which may hurt third-quarter results.

In the long-term, Cumberland said the company will continue reporting strong earnings and sales growth because of its market leadership and strong execution. Cumberland said Dick's has 7 percent market share in the $52 billion sporting goods retail market.

Bring on the hate, we welcome that, the more ammo to push shares down even further, if we see below $30, the Masters recommend jumping in.

Article by Ted Gottsegen

Contributor at TheStockMasters.com

Disclaimer: The Author does not hold any positions or shares in the securities mentioned in this publication nor does he stuff his shorts.

Our Original newsletter that has enlightened our subscribers for over a year. It contains What to Buy, What to Sell, and Market Commentary. We have a 17.5% return since October 2006 and the average wait for a return is only 3.61 months and we have the track record to prove it (click here to view Master Picks track record). We've had great feedback, and in turn have already created a unique following of thousands of Stockmasters. Our asking price is only $45 for a 12 month subscription.