3/21/2014 7:45 PM ET
Dick's Sporting Goods, 9 more stocks to watch
The retailer scores a spot on StockScouter's latest list of 10 recommended stocks.
Compiled from StockScouter ratings by Verus Analytics
As college basketball fans across the country bemoan their busted NCAA tournament brackets, one name looks like the best pick of them all: Dick's Sporting Goods (DKS).
The season of soccer cleats and baseball gloves is nearly upon us, and the cold and snowy winter, which froze up sales at many large retailers, seemed to have little impact on the sporting goods chain. The company reported a 7.9 percent year-over-year increase in sales for the quarter ending Feb. 1. Same-store sales were up 7.3 percent in that time, about double the company’s original forecast of 3 to 4 percent.
The Motley Fool’s Michael Lewis calls the sporting goods chain "an industry champ." While most brick-and-mortar stores have struggled against online competition, Lewis says, Dick's has avoided this fate "by selling things that people want to get their hands on before a purchase -- golf clubs, baseball bats, shoes, workout equipment." This has bought the company time to stay ahead of the trend and compete in e-commerce on its own terms, Lewis says.
Shares of Dick's Sporting Goods get a '10' from the StockScouter rating system on MSN Money, the highest score possible. Based on StockScouter's analysis, shares of DKS are expected to significantly outperform the market over the next six months with less than average risk.
Read the full Scouter report on Dick’s Sporting Goods here.
StockScouter Top 10 for March 21
AmBev S.A. (ABEV)
Breweries & beverages
Dick's Sporting Goods (DKS)
Fortress Investment Group (FIG)
International Business Machines (IBM)
Melco Crown Entertainment (MPEL)
Resorts & casinos
Annaly Capital Management (NLY)
Real estate investment trust (REIT)
StockScouter beats the market
We think the StockScouter rating system developed by Verus Analytics for MSN Money is one of the best tools you can use when you're trying to decide where to invest.
StockScouter looks for stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price in the future, based on how those factors have influenced stock prices in the past.
The system assigns each stock an expected six-month return and balances that return against the stock's expected volatility.
Scouter rates stocks on a scale of 1 to 10, and ratings can change daily. Ratings and data in the chart above were current as of this article's publication date.
In addition to the daily top 10 list described above, StockScouter is used by investment research firm Verus Analytics (previously known as the quantitative business unit of Gradient Analytics) to generate a monthly benchmark portfolio of stocks that, refreshed monthly, has outperformed the market since its inception in August 2001.
An investor who began in 2001 by investing in each of the benchmark portfolio's top 10 stocks at the start of the month, selling them at the end of the month and then starting fresh with a new group of 10 stocks, would have generated returns, before trading costs and taxes, of 1,044 percent through Feb. 28, 2014.
Writer Jon Markman, at the time a columnist for MSN Money, collaborated with company researchers on the tool.
Markman suggested rolling over the top 10 stocks every six months to hold down trading costs, a strategy that might be a better fit for most investors; that would yield different results, which would vary based on your starting point.
Performance through Feb. 28, 2014
Full 50 position portfolio
Top 10 portfolio
Inception: August 2001
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Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
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