• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

Dick's Sporting Goods Stock Shed 11%, But I Don't Expect a Come-From-Behind Win

DKS fell to $34.61 on weak guidance, and I see the stock languishing between $30 and $34 for months.
By TIMOTHY COLLINS
Mar 12, 2019 | 04:09 PM EDT
Stocks quotes in this article: DKS, NKE, UA, LULU

What's the incentive to own flailing Dick's Sporting Goods (DKS) , which fell 11.2% to close at $34.61 on Tuesday after management issued disappointing forward guidance?

Wouldn't folks rather own Nike (NKE) or heck, roll the dice on Under Armour (UA) or Lululemon (LULU) ? After all, sporting-goods stores haven't been sporting-good buys for years. And even if you like retailers, why limit yourself to a specific retail sector that's been seeing -3.7% same-store sales growth and is projected to see 0% to 2% growth, at best, going forward?

Maybe you want to chase the thesis that with 20% short interest Dick's could see a short squeeze. Unfortunately, most short squeezes require a technical trigger or some good fundamental news to set them off, and I don't see either of those happening any time soon.

Consider Dick's earnings report, which came out Tuesday morning. It looked decent enough, with the company reporting earnings per share of $1.22 -- $0.16 ahead of estimates. Revenue was also essentially in line, while management announced plans to relaunch Dick's private label.

But guidance for the upcoming fiscal year's EPS came in at a midpoint a dime below analysts' expectations. That sent DKS tumbling, so it's clear that investors weren't impressed with management's forward guidance. I can't say I blame them, and I think it's fair to cross off the potential of any positive fundamental news causing a short squeeze in the near term.

As far as Dick's technical setup goes, Tuesday's breakdown has pushed Dick's well below the stock's recent trading channel (the black diagonal lines at right below):

This channel shows that the bulls were in strong control as Dick's moved from $30 to $40 since Christmas Eve. But multiple secondary indicators -- the Chaikan Oscillator, Full Stochastics and Stochastics RSI -- are now showing bearish crossovers.

Add it all up and I'm looking for Dicks to test $33 initially. However, I suspect that the stock will wallow between $30 and $34 for several months.

The Bottom Line

To me, there are simply too many other stocks out there that offer significantly more upside, sit in stronger overall sector or have catalysts that can justify taking on a risk similar to Dick's. So for now, I'm shopping elsewhere with my portfolio dollars.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
TAGS: Fundamental Analysis | Investing | Stocks | Technical Analysis | Retail

More from Stocks

Twitter's Charts Get a New Life but the Candles Suggest Caution

Bruce Kamich
Feb 26, 2021 10:31 AM EST

I'm reluctant to probe the long side at this point in time.

What's Driving NL Industries Stock Higher?

Jonathan Heller
Feb 26, 2021 10:30 AM EST

NL currently garners no analyst coverage, which is one of the reasons that you've likely never heard of the company.

Airbnb May Not Be So Hospitable in the Weeks Ahead

Bruce Kamich
Feb 26, 2021 9:31 AM EST

Stand aside for now.

NovoCure Has Broken Down on the Charts: What to Do Now

Bruce Kamich
Feb 26, 2021 9:10 AM EST

Our latest analysis and trading strategy on NVCR.

It's the Fed vs. the U.S. Bond Markets Now!

Maleeha Bengali
Feb 26, 2021 9:00 AM EST

All eyes will be on the Fed during their March FOMC meeting. It remains to be seen what they do next.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:31 PM EST PETER WILLSON

    Has the Short-Term Top Come for the XLF/Banks?

    The has triggered a long-term overbought signal ...
  • 10:10 AM EST GARY BERMAN

    DLTR: The Buck Might Not Stop Here, but I Am Looking for a Bounce

    Dollar Tree is trading inside our long-term boun...
  • 08:36 AM EST GARY BERMAN

    Wednesday Morning Fibocall for 2/24/2021

    SPX (Long-Term View) The 2/16 HIGH @ 3950.43 is ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login