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$20.92 2.63 (14.38%)
8/21/2008 4:02 PM

Dick's Sporting Goods, Inc. (DKS)

CAPS Rating:
****

An authentic full-line sporting goods retailer offering a assortment of brand name sporting goods equipment, apparel, and footwear in a specialty store environment.

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Recs

4

Avatar EV38 (99.80) Submitted: 1/26/07 1:10 PM : Underperform Start Price: $25.67 DKS Score: 8.17

A specialty retail store can not have a PE of 28 and expect to remain at that level. This was a pure spec play on the way up - technicals, buyouts, S&P addition...well that news is all behind us. The technicals look aweful on DKS - if it breaks 48, it can easily drop to 34, where the PE would be a much more decent 19. The private equity buyout rumours have died down, as they are looking to add themselves, with that questionable buy on Golf Galaxy, and S&P buying is done. This is my biggest put option holding right now, largely because I already took some profit off the march 55's after that ridiculous runup, and dumped all that into March/June 50's.

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Avatar ARBinEXILEman (< 20) Submitted: 2/13/07 9:35 AM

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i agree 100% with your take - ( for HIBB also) - these multiples are short lived in this business - i see this falling into the low to mid 30's as well

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Avatar EV38 (99.80) Submitted: 3/13/07 8:20 PM

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man, I got my ass kicked on this one...which hurts cause it was my biggest put option holding and in a down market I see them worth 5 cents as the bulk of them expire in March....ah well i still got a ton of other lousy stocks to make put money on :)

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Avatar bqmassey (90.20) Submitted: 4/14/07 5:42 AM

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I have to disagree. It may be trading at a high multiple, but it's going to stay that way as long is significant growth. You can't compare an established chain's multiples with a company that's got small market share but is gaining as quickly as DKS is. People pay for growth, they pay for future earnings. The multiple will come down one day, but not until the growth stops. When that happens, it will be trading at this price or higher.

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