Investing

CEO Reduces Dick's Sporting Goods Stake by 25%

Trey Thoelcke

Published: February 24, 2024 9:45 am

Following the behavior of company insiders as they manage their positions in their own companies can reveal a lot. People may sell shares for many reasons, such as buying a house, paying for college, or estate planning. They generally only buy shares for one reason: to make more money.

Often, one of the largest and best-informed shareholders in any company is the chief executive officer. Let’s have a look at whether Dick’s Sporting Goods Inc. (NYSE: DKS) CEO Lauren Hobart has been increasing or decreasing her shares over the past year and whether she knows something we don’t.

What You Need to Know About Dick’s

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Dick’s Sporting Goods operates as a specialty retailer primarily in the United States. The company provides hardlines, including sporting goods equipment, fitness equipment, golf equipment, and hunting and fishing gear products. It also offers apparel, footwear, and accessories.

The company owns and operates Sporting Goods, Golf Galaxy, Field & Stream, Public Lands, Going Going Gone!, and other specialty concept stores; and Dick’s House of Sports and Golf Galaxy Performance Center, as well as GameChanger, a youth sports mobile application for video streaming, scorekeeping, scheduling, and communications. The company also sells its products through e-commerce websites and mobile applications. (Customers are abandoning these 25 brands.)

Dick’s Sporting Goods was incorporated in 1948 and is headquartered in Coraopolis, Pennsylvania. Nearby Pittsburgh is home to Alcoa Corp. (NYSE: AA), PNC Financial Services Group Inc. (NYSE: PNC), and U.S. Steel Corp. (NYSE: X). Competitors of Dick’s include Academy Sports and Outdoors Inc. (NASDAQ: ASO), Big 5 Sporting Goods Corp. (NASDAQ: BGFV), and Hibbett Inc. (NASDAQ: HIBB). Hobart has been chief executive and president of Dick’s since February 2021.

The company posted annual revenue of around $12.7 billion, and it has a market capitalization of around $13.6 billion. The stock is up over 13% year to date and recently traded at an all-time high of about $170 per share. The share price is 28% or so higher than a year ago.

How Dick’s CEO Is Trading

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One year ago, Hobart owned almost 316,700 shares, worth about $31.1 million. On last look, that share count was more than 88,300 lower to about 228,300, which is a stake of much less than 1%. Because of last year’s share price gain, the value of the stake actually increased more than 3% to around $34.3 million.

While the rising value of the stake no doubt pleases CEO Lauren Hobart, by selling shares she has left money on the table. However, Hobart could have sold shares for a variety of reasons, and we may never know why. Unless she knows something that we don’t, there’s little reason to suspect a lack of confidence. The most recent quarterly report was strong and accompanied by an improved outlook for the year. The dividend has grown over the past decade, and it more than doubled last year. The share price recently overran the consensus price target and is still close to that all-time high.

Other internal shareholders to keep an eye on include Executive Chair Edward Stack and Vice Chair William Colombo. They each have a stake larger than Hobart’s, worth $2.2 billion and $66.7 million, respectively.