Trade-Ideas: Dick's Sporting Goods (DKS) Is Today's Post-Market Leader Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Dick's Sporting Goods ( DKS) as a post-market leader 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 $73.0 million.
  • DKS is up 2.8% today from today's close.

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More details on DKS:

Dick's Sporting Goods, Inc. operates as a sports and fitness retailer primarily in the Eastern United States. The company provides hardlines, including sporting goods equipment, fitness equipment, golf equipment, and hunting and fishing gear products; apparel; and footwear products. The stock currently has a dividend yield of 0.9%. DKS has a PE ratio of 20.5. Currently there are 15 analysts that rate Dick's Sporting Goods a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Dick's Sporting Goods has been 1.5 million shares per day over the past 30 days. Dick's Sporting Goods has a market cap of $5.4 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.30 and a short float of 7.2% with 5.41 days to cover. Shares are down 7.8% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Dick's Sporting Goods as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 6.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • DICKS SPORTING GOODS INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DICKS SPORTING GOODS INC increased its bottom line by earning $2.31 versus $2.10 in the prior year. This year, the market expects an improvement in earnings ($2.69 versus $2.31).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • DKS's debt-to-equity ratio is very low at 0.08 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.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, DICKS SPORTING GOODS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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