Valuentum Exclusive Analysis for the Discerning Investor

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May 15, 2025

Dick’s Sporting Goods to Acquire Foot Locker
Image: Dick’s Sporting Goods’ shares sold off on its announcement that it would acquire Foot Locker. On May 15, Dick’s Sporting Goods announced that it would acquire Foot Locker in a transaction that implies an equity value of $2.4 billion and enterprise value of $2.5 billion. Dick’s intends to finance the acquisition through a combination of cash on hand and new debt and is expected to close in the second half of 2025. Dick’s intends to operate Foot Locker as a standalone business unit within its portfolio, while it maintains the Foot Locker brands. Dick’s also released preliminary first quarter results, showcasing comparable store sales growth of 4.5% and non-GAAP earnings per diluted share of $3.37. The ongoing strength in its business positions it well to gobble up Foot Locker. The deal will allow Dick’s to serve consumers in new locations in the U.S., while also expanding internationally for the first time. The combined entity will benefit from learnings from Dick’s House of Sport and Foot Locker’s Reimagined Concept stores and serve as a stronger partner for key brands, offering multiple platforms for both established and emerging partners. Dick’s expects the transaction to be accretive to EPS in the first full fiscal year post-close and to deliver between $100-$125 million in cost synergies. Our $229 per share fair value estimate for Dick’s remains unchanged at this time.

May 6, 2025

Magnificent 7 Earnings Reports Not Bad Thus Far
Shortly after Trump's Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500, for example, is down just 3.3% year-to-date, excluding dividends. A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if a full US/China trade agreement won't be completed in the near term, as full-scale trade deals take time to mold. Thus far, we have been impressed by earnings this season, particularly by the Magnificent 7.

Apr 4, 2025

Trump Tariffs Higher than Expected; What We're Doing
The Trump tariff increases came in larger than what we were expecting, and it remains to be seen how they will flow through the global economy, as we monitor potential retaliatory tariffs from other countries. As it relates to the equity markets, we’re taking a wait and see approach at the moment as we monitor new policy changes related to trade, immigration, fiscal (tax), and regulations. In short, we’re not overreacting to the sell off as we won’t have a great handle on the tariff impact to companies for a few quarters when they report results post-tariff increases. That said, we’re expecting continued market volatility, with meaningful risk to the downside, before trade uncertainty alleviates in the coming months.

Mar 14, 2025

Dividend Increases/Decreases for the Week of March 14
Let's take a look at firms raising/lowering their dividends this week.

Mar 11, 2025

Dick’s Sporting Goods Raises Quarterly Payout
Image Source: TradingView. Dick’s Sporting Goods continues to be shareholder friendly, with the board authorizing a 10% increase in its quarterly dividend, to $4.85 on an annualized basis, and a new five-year share repurchase program up to $3 billion. Looking to 2025, Dick’s Sporting Goods expects full year comparable sales growth to be in the range of 1%-3%, net sales to be in the range of $13.6-$13.9 billion, and earnings per diluted share in the range of $13.80-$14.40, the latter compared to $14.05 in full year 2024. The company expects to open roughly 16 additional House of Sport locations and about 18 additional Dick’s Field House locations in 2025. Dick’s Sporting Goods ended its fiscal year with $1.69 billion in cash and cash equivalents and total debt of $1.48 billion. We continue to like Dick’s Sporting Goods as an idea in the Dividend Growth Newsletter portfolio.

Dec 2, 2024

Dick’s Sporting Goods Raises 2024 Guidance
Image Source: Dick’s Sporting Goods. For the 39 weeks ended November 2, 2024, Dick’s Sporting Goods’ cash flow from operations was $680.3 million, while capital spending came in at $565.6 million, resulting in free cash flow of $114.7 million. Looking to all of 2024, management raised its guidance for comparable store sales growth to the range of 3.6%-4.2%, up from 2.5%-3.5% previously. Net sales are targeted at $13.2-$13.3 billion, up from $13.1-$13.2 billion previously. Dick’s Sporting Goods also raised its 2024 earnings per diluted share guidance to the range of $13.65-$13.95, up from $13.55-$13.90 previously. We liked Dick’s Sporting Goods’ quarterly performance and increased full year guidance, and the stock remains a key idea in the Dividend Growth Newsletter portfolio.

Sep 4, 2024

Dick’s Sporting Goods Beats Second Quarter Numbers, Raises 2024 Outlook
Image: Dick’s Sporting Goods has performed nicely since the beginning of 2022. Looking to all of 2024, Dick’s Sporting Goods’ earnings per share is targeted in the range of $13.55-$13.90, up from $13.35-$13.75 per share previously, while net sales are expected in the range of $13.1-$13.2 billion (unchanged from last quarter), on comparable sales growth of 2.5%-3.5%, up from 2%-3% previously. We like Dick’s Sporting Goods’ quarter, and we’re fans of its raised outlook. The firm remains a holding in the portfolio of the Dividend Growth Newsletter.

Aug 9, 2024

Paper: Value and Momentum Within Stocks, Too
Abstract: This paper strives to advance the field of finance in four ways: 1) it extends the theory of the “The Arithmetic of Active Management” to the investor level; 2) it addresses certain data problems of factor-based methods, namely with respect to value and book-to-market ratios, while introducing price-to-fair-value ratios in a factor-based approach; 3) it may lay the foundation for academic literature regarding the Valuentum, the value-timing, and ultra-momentum factors; and 4) it walks through the potential relative outperformance that may be harvested at the intersection of relevant, unique and compensated factors within individual stocks.

Jul 7, 2024

Latest Report Updates
Check out the latest report updates on the website.

Jun 28, 2024

Nike’s Revenue Under Pressure
Image: Nike’s shares have languished of late, and a comeback will take some time. Nike retains one of the strongest brand names across our coverage universe, and customer loyalty remains a key attribute to a bull case for shares. However, the company’s fiscal 2025 will be challenging, with considerable weakness during the first quarter of fiscal 2025. We like Nike’s business model, but we remain on the sidelines as we adjust our valuation model to reflect the lower-than-expected fiscal 2025 performance.