Dick's Sports a Rash of Stock Sales

[Bob J]

http://online.wsj.com/article/SB125607671068097403.html#mod=todays_us_money_and_investing

Insiders at retailer Dick's Sporting Goods have been giving their brokers a workout, selling a combined 1.67 million shares since August, with more than half of those sales this month.

The insiders sold nearly 10 times the shares they bought in all of 2008, a sign that sentiment may be shifting at a company whose stock price has nearly doubled since its November lows, said Jonathan Moreland, research director at InsiderInsights.com.

In 4 p.m. New York Stock Exchange composite trading Tuesday, Dick's shares fell 45 cents, or 1.8%, to $24.73. The insiders sold their stock at $22.25 to $25.29 a share.

"It is not a stock I would consider going long," Mr. Moreland said. "I'm avoiding it."

Of particular concern, Mr. Moreland said, is that some of the insiders unloaded such large portions of their stakes. Director Lawrence J. Schorr sold 50,000 shares of the Pittsburgh company since Aug. 25, leaving him with 28,602 shares. Vice President Jeffrey R. Hennion sold 20,000 shares since Sept. 17; he now holds 51,682 shares. Chairman Edward W. Stack and Director William J. Colombo also sold shares.

The company didn't respond to a request for comment. In August, a Dick's spokesman had said the company doesn't discuss insider-stock transactions.

Other analysts said they aren't concerned about the sales. They said Dick's has fared rather well given the overall economic climate, and the store could see positive same-store-sales comparisons as soon as the fourth quarter. If anything, they said, the insiders are just capitalizing on a strong stock run.

"I don't think that the company is expecting things to get worse," said Sean P. McGowan, an analyst at Needham & Co. "The signs of trouble are in the rearview mirror." Mr. McGowan has a "hold" rating on Dick's.

Dick's, which has more than 400 stores in the U.S., has slashed inventory amid a decline in consumer spending. The company said in its second-quarter earnings report that it would open 24 new stores in 2009. Analysts have generally been enthusiastic about the locations.

Even Mr. Moreland, who believes Dick's is too pricey, doesn't think investors should be shorting the company's stock. While he doubts it will climb much more, he doesn't think it will drop precipitously.

In August, when the insiders first started selling, Mr. Moreland suggested it was a good time to get out. Now that stock indexes are more solidly on the rise, he said, "The imminency of [the stock] collapsing isn't quite so severe."