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NOTE TO EDITORS: The Following Is an Investment Opinion Being Issued by the IO News Wire.

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Dick's Sporting Goods Inc. (NYSE: DKS) reported higher third quarter earnings of 16 cents per share compared with 5 cents per share a year earlier that beat expectations but the company forecast fourth quarter results below estimates. Shares of the...

A record number of mortgage delinquencies sent the markets tumbling during the midday with the Dow plunging 131 points to 10,294. Nasdaq plummeted 41 points to 2151.

It looks like we are back to the fundamentals as concerns of economic recovery were exacerbated by a negative housing foreclosure update that confirmed the real estate crisis is spreading to the prime market. An economy bleeding jobs at a minimum monthly rate of 500k is the underlying cause.[More...]

Bank of America/Merrill (BAC) downgraded a number of semiconductor companies, expecting a modest inventory correction, even as economies improve and demand for electronics rises. Four shares were downgraded to neutral, including Intel (INTC), Texas Instruments (TXN), Marvel Technology Group (MRVL) and LSI Corp (LSI). The form lowered Maxim Integrated Products ...

• Bank of America/Merrill (NYSE:BAC) downgraded a number of semiconductor companies, expecting a modest inventory correction, even as economies improve and demand for electronics rises.  Four shares were downgraded to neutral, including Intel (NASDAQ:INTC), Texas Instruments (NYSE:TXN), Marvel Technology Group (NASDAQ:MRVL) and LSI Corp (NYSE:LSI).  The form lowered Maxim Integrated Products (NASDAQ:MXIM), National Semiconductor (NYSE:NSM), Power Integrations (NASDAQ:POWI) and Microchip Technology (NASDAQ:MCHP) to underperform

• Advanced Micro Devices (NYSE:AMD) rose 10.6% yesterday. The firm announced a private debt offering of $500 million of senior notes. This morning's news saw FBR Research raising its price target to $9 from $8, while maintaining a "market perform" opinion

• Goldman Sachs (NYSE:GS) reiterated its "buy" rating on CVS Caremark (NYSE:CVS), saying the shares are cheap at current levels.  The firm said at $30, CVS is selling at just 10.6 times 2010 estimates, below a two year, 14x average, with long-term growth of 13% anticipated

• Reports said Blackstone (NYSE:BX) plans to acquire Birds Eye Foods, the largest US frozen-vegetable company, for over $1.3 billion in an all-cash deal

• Tenneco (NYSE:TEN) priced a 12 million share offering at $16.50 per share for $187 million

• Sears Holding (NASDAQ:SHLD) reported a third quarter loss of 81 cents, less than the $1.09 loss expected, on better-than-expected revenues of $10.19 billion

• Dick's Sporting Goods (NYSE:DKS) reported third quarter earnings of 16 cents a share, ahead of estimates by 7 cents as revenues of $990 million topped expectations of $961 million.  The company said it expect fourth-quarter earnings of 41 cents to 46 cents a share

• Children's Place (NASDAQ:PLCE) reported in-line earnings of $1.38 on in-line revenues of $463 million. Comparable sales fell 2%

• Williams-Sonoma (NYSE:WSM) third quarter beat by 11 cents as earnings posted at 16 cents and revenues exceeded estimates at $729 million

Zacks Investment Research

Traders watch earnings announcements keenly, as changes in a company’s financials can be a good indication whether a company is on the right track, or headed the wrong way.   Hibbett Sports, Inc. (HIBB) is scheduled to release its earnings results Thursday. The company currently has an earnings per share ratio (EPS trailing twelve months) of .94 and investors are hoping to see that number grow. Let’s take a look at the performance of the stock since its previous earnings release.   {loadposition link_newslink1}     {loadposition livevideopromo}       {loadposition homeaccordion2}   {loadposition contentad}       In the past three months, the stock has posted a 8.20% gain in terms of stock price. Over the same period, the Sporting Goods Stores industry group has returned a combined 12.94% gain.   So the eyes of investors turn to this new round of earnings.   Now, good earnings don’t always lead to higher stock prices, but keeping up on earnings is still a vital part of your fundamental stock analysis. Also note that companies often change earnings dates, so you should double-check them often.   When looking at earnings, it’s very helpful to see how stocks compare to others in its industry group. And even though two stocks may not be direct competitors, many analysts and institutional investors still compare them and evaluate them relative to other stocks in their group.     HIBB is in the Sporting Goods Stores industry group where it competes for investor dollars with companies like Big 5 Sporting Goods Corp. (BGFV), which released its earnings on 11/03 and last reported a 77.36% gain in quarter-over-quarter EPS.   Another industry peer, Cabela's Inc. (CAB) released its earnings on 10/27 and last reported a 90.46% gain in QOQ EPS.   Dick's Sporting Goods Inc. (DKS) is the stock with the biggest market cap in the Sporting Goods Stores industry at $2.81B. It closed yesterday at $24.92   To better understand how to evaluate earnings announcements and the affect they have on your portfolio, be sure to read Earnings Announcements and EPS.   {loadposition link_nowtime} {loadposition followus}

Schaeffer's Laura Houser takes a look at activity on the Street after the market close

Dick's Sporting Goods, Inc. (Public, NYSE:DKS) stock has dropped 11% in the last month and shares are now just $3 above their 52-week low.  TheStreet.com's James Altucher mentioned over the holiday break that Dick's Sporting Goods (DKS) was up as much as 1.7% but ending the week down 4%. Dick's, however, is one of the few retailers that is bucking current trends. Its last quarterly earning report was amazing, sending the stock well over $30. James is convinced that Dick's is being irrationally sold off with the retailers.

Dick's Sporting Goods is a full-line sporting goods retailer offering an assortment of brand-name sporting equipment, apparel and footwear. The company operates 340 Dick's Sporting Goods stores and 77 Golf Galaxy stores throughout the U.S.. 

So how about those 'amazing' Q3 2007 results?

Dick's Sporting Goods Inc (DKS) on Nov 20th, 2007 posted a 57% rise in quarterly profit and raised its full-year outlook.

"Improved margins, greater efficiencies, the strength of our golf business and strong cash flow continue to drive our earnings increases," Chief Executive Edward Stack said in a statement. For the latest third quarter, the company reported net income of $12.2 million, or 10 cents a share, compared with $7.8 million, or 7 cents a share, a year ago. Results for the latest quarter include operating results of Golf Galaxy.

Net sales rose 18 percent to $838.8 million due to the opening of new stores and the inclusion of Golf Galaxy, which was acquired by Dick's Sporting in February. Analysts were expecting earnings of 6 cents a share, before items, on revenue of $845.9 million, according to Reuters Estimates.

For 2007, the company projected earnings of $1.29 a share, up from its earlier view of $1.24 to $1.25 a share. It sees a 2 percent increase in comparable store sales at Dick's Sporting Goods stores. Yet despite the good news shares of DKS have tanked, just like everything else on Wall Street.

Fellow Masters, this is a buying opportunity.  Dick's is a great stock to start of the New Year and I wouldn't be surprised to see shares inch up few % points in the coming weeks.

Minyanville.com ran an article a few days ago titled - Dicks Sporting Goods: A Forgotten Christmas Trade.  Here's what they had to say:

Instead of looking for the best ‘value’ whose P/E looks great right up until the time the “E” gets halved, I’d rather hunt for a superior and niche franchise that may be sitting on support inside of an uptrend instead. Dicks Sporting Goods (DKS) has posted +43% earnings growth over the past 4 quarters, versus the sector’s decline of (9%). DKS surprised the Street with a big upside earnings’ surprise last quarter versus an average of a (13%) miss for the sector. DKS’ Return on Equity is 22% versus the sector’s 11%. Yet DKS shares trade in line with the sector on a valuation basis using either earnings or revenues.

Unfair to compare it to many in that group? Yes, and that’s the sort of mismatch I’d be looking for, especially if you can be patient and wait for pullbacks where above average fundamental stories actually fall below average in performance.

Since Labor Day, the pullback in DKS was actually larger than the sector’s, perhaps setting up an interesting mismatch of reward over risk, especially if you want to use stops below your own version of a support line.


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Most importantly DKS is expanding, with a total market cap of $3 billion versus over $30 billion for the sector. The firm is  planning to open its first store in Houston and I will gladly stand in line. The only sporting goods store (remarkably, especially considering the sports culture down here) nearby could not try harder to lose my business.

Let's start 2008 with some good investments, Dicks' could be one of them.

Article written by Ted Gottsegen 

Contributor at TheStockMasters.com

Disclaimer: The Author does not hold any positions or shares in the securities mentioned in this publication

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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."

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

Financials

 (In millions of USD)

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. 

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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.

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Ed Stenson takes a look back at the market activity today.

Ed Stenson takes a look at market news before the open.