Running Header: DISCUSSION BOARD 1

Discussion Board One Jarrett Davis BUSI 530

DISCUSSION BOARD 1 In this paper, an effort is made to analyze Dicks Sporting Goods (DSG) from an investor perspective. In such analysis, we should be aware of trends in the industry, while paying close attention to the volatility of DSG stock. Furthermore, we want to analyze financial statements, paying attention to growth in income and real assets. Lastly one should understand the DSG market share, the factors brought about by the U.S. economy and status of the industry. According to www.netadvantage.standardandpoors.com , the investor outlook on DSG stock is neither good nor bad. DSG is a large specialty retail chain, and it is not in their favor that total U.S. consumer spending is only expected to rise 2.2 % in 2012. Researchers find that the lackluster state of consumer spending will a problem for specialty retail stores. Retail firms that sell leisurely materials such as sporting goods could be at significant risk more so than retail chains that sell necessities. However, all of these factors can be overcome by industry leaders that penetrate multiple markets, with an established brand name, and online options. In the sporting goods sector, DSG and their closest competitors are all considered high risk, high reward. Retail requires substantial overhead, and is always dependent upon consumer spending. DSG measures as the highest possible reward, but that possible reward is accompanied by the greatest amount of risk. DSG has aggressively implemented a store expansion strategy. Their brand name is strong and they are present in many markets. Such expansion will bring about high overhead costs that could be a burden if sales numbers began low. With the exception of 2009, DSG has made money and gained assets on a consistent basis. They display trends of increases revenues annually. Earnings per share have increased as has their total capital and overall assets. These numbers could lead someone to believe that DSG will remain an industry leader in the sporting goods sector for years to come. DSG stock closed at $47.14 per share on June 26th 2012, and is said to have upside potential of over 15% during the next twelve months.

DISCUSSION BOARD 1 One can appreciate the DSG position within the sporting goods industry, as their firm has made money. However, as an investor you likely feel the industry is getting more competitive, at a point those consumers are saving most of their expendable income. The DSG brand and financials are clearly stable; however the DSG stock is very volatile. It must be at this point considered a risky stock, and should be countered by less risky stock in a portfolio. As an investor one might search for a less risky market to invest in until the next economic growth period.