Dick's Sporting Goods (DKS) Is Today's Perilous Reversal Stock
Trade-Ideas LLC identified
(
) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Dick's Sporting Goods as such a stock due to the following factors:
- DKS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $181.3 million.
- DKS has traded 1.6 million shares today.
- DKS is down 3% today.
- DKS was up 5.1% yesterday.
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More details on DKS:
Dick's Sporting Goods, Inc. operates as a sporting goods retailer primarily in the eastern United States. It provides hardlines, including sporting goods equipment, fitness equipment, golf equipment, and hunting and fishing gear products; apparel; and footwear products and accessories. The stock currently has a dividend yield of 1.5%. DKS has a PE ratio of 15. Currently there are 10 analysts that rate Dick's Sporting Goods a buy, 1 analyst rates it a sell, and 8 rate it a hold.
The average volume for Dick's Sporting Goods has been 2.1 million shares per day over the past 30 days. Dick's Sporting Goods has a market cap of $4.8 billion and is part of the services sector and specialty retail industry. The stock has a beta of 0.49 and a short float of 5.4% with 1.11 days to cover. Shares are up 23% year-to-date as of the close of trading on Friday.
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Analysis:
rates Dick's Sporting Goods as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.2%. Since the same quarter one year prior, revenues slightly increased by 6.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- DKS's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.16 is very weak and demonstrates a lack of ability to pay short-term obligations.
- DICKS SPORTING GOODS INC's earnings per share declined by 5.7% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, DICKS SPORTING GOODS INC reported lower earnings of $2.84 versus $2.85 in the prior year. This year, the market expects an improvement in earnings ($2.92 versus $2.84).
- The gross profit margin for DICKS SPORTING GOODS INC is currently lower than what is desirable, coming in at 32.75%. Regardless of DKS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.42% trails the industry average.
- You can view the full Dick's Sporting Goods Ratings Report.
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