Weekly Issue #4
This one found me — I wasn’t watching it, and I hadn’t heard a thing about it. The app has an Unusual Activity page that sweeps the entire market for stocks trading at double their normal volume or more — usually a sign of news, fear, or big money moving. A few weeks ago Dick’s Sporting Goods (see DKS →) turned up near the top of it. The stock had fallen off a cliff — and the people buying the dip were the last you’d expect: its own directors.
Dick’s Sporting Goods (NYSE: DKS) — ~$139
You know the store — you’ve probably shopped there, and a business you already understand is exactly where smart investing starts. What you may not know: its stock crashed this year after a big, debt-fuelled acquisition, and a cluster of insiders just bought the dip. Let’s run the checks, flags and all.
| The check | Reading | Verdict |
|---|---|---|
| Cheap on earnings? (P/E) | 14.8 | ✓ Under Graham’s 15 |
| Priced vs book (P/B) | 2.2× | ⚠ Above Graham’s 1.5 line |
| Dividend | $4.93/yr (~3.5%) | ✓ Healthy income |
| Off its high | −43% from $244 | — the crash |
| Insiders (skin in the game) | 4 buying ~$3.7M | ✓ Rare cluster buy |
| Wall Street | Buy · $156 target | ✓ ~12% upside |
Bottom line: not a pristine Graham bargain — it carries acquisition debt and a few yellow flags. But it’s a fair price for a household name, a real 3.5% dividend, and the rarest bullish signal there is: the people who run it buying the crash.
1. Price vs earnings (P/E): 14.8 — under Graham’s 15 ceiling. Not dirt cheap, but a fair price for a category leader — especially one that’s fallen this far.
2. Priced vs book (P/B): 2.2× — above Graham’s 1.5 line — you’re paying up for book value, partly because the acquisition loaded on debt. Not a deep-value pass: the app rates it “Borderline,” clearing 5 of Graham’s 8 tests.
3. The dividend: ~3.5%. — $4.93 a share. After a 43% drop the yield has swelled to a healthy 3.5% — you’re paid to wait.
4. What crashed it — and what didn’t. — Don’t misread the 43% drop as “the business is broken.” In its late-August quarter the core was thriving: revenue up 53% to $5.59B, flagship DICK’S comps up 4.9%, and $3.55 earned per share. One thing spooked the market — management cut its new Foot Locker unit from a projected profit to an operating loss. A healthy core compounder dragged down by one bad acquisition, not a dying company. That’s the whole thesis.
5. The signal that matters — insiders (and funds) buying. — The heart of it. In late August, four directors bought DKS on the open market — ~$3.7M between them at ~$129; one put in $2.2M alone — and they haven’t stopped: a director bought more on Sep 1 at ~$133, buying into the bounce, not backing off. The kicker: near $228 in May, the CEO was selling. And hedge funds piled in too (Maverick +42%, Castle Hook +160%). Insiders selling the top and buying the bottom, funds alongside — about as loud as this signal gets. Wall Street agrees: 38 buys, 27 holds, no sells, target $156 (~12% up).
How the app put this on my radar
I wasn’t looking for this one — the app brought it to me (open it here →). That is what the app is for. Nobody can watch thousands of tickers a day; the Unusual Activity scan watches them for you and hands back a short list of names where something is actually happening. Free accounts see a slice of it — Pro sees the whole market. From there it took five minutes: spot it → check the insiders → run the valuation.
The step in the middle — the insider-activity feed that showed the four directors buying — is free for anyone. Check “are the insiders buying?” on any stock yourself, right now, free.
Then, once I bought it, I put DKS on my watchlist and armed its alerts — including one that tells me if its Graham verdict ever shifts between Pass, Borderline and Fail. That is the half people skip. Finding a stock is the easy part; being told when the story changes while you aren’t looking is the part that decides how it ends.
The honest price
At ~$139, DKS trades just under 15× trailing earnings with a 3.5% dividend — fair for a leader cut nearly in half. Look forward and it’s cheaper: ~9× next year’s expected earnings, as the core grows and Foot Locker’s losses clear. But be clear-eyed: on the strict Graham Number (~$122) it’s roughly fair, not a steal. That’s the point of running more than one method — the app puts the conservative Graham figure and the ~$245 blended fair value side by side, one built on what the balance sheet will defend today and the other on the earning power this business had before the crash. The gap between them is the question you’re being asked to answer. The real case: a good business at a fair price, cut in half, with insiders and analysts betting on recovery. The $156 target (~12% up) is a reasonable first waypoint.
Full disclosure: I bought DKS myself last week near $126 — so I’m talking my own book. This is a contrarian turnaround bet, not a sleep-easy value stock. The risks below are real — read them first.
Before you buy — three things to watch
1. The debt, and the drained cash. The big one. Buying Foot Locker took the balance sheet from comfortable to stretched: cash under $1 billion (from ~$2.6B), net debt up to roughly $7 billion. Much of it is store leases — normal for big-box retail, and Foot Locker added thousands of leased stores — but the cushion is thinner and the leverage is real. Watch the paydown.
2. Foot Locker has to work — and right now it isn’t. The thesis rests on fixing a struggling mall-based footwear chain, and early signs are rough: comps fell 3.6% last quarter, inventory is high, and management just cut its outlook to a full-year operating loss — a sharp reversal from the profit it first promised. If it doesn’t turn, that debt bites. The single biggest risk — watch its comps and inventory.
3. The dividend has to hold. That 3.5% yield is only a gift if it holds — and Dick’s has cut before (the app flags it). With cash tighter and debt higher, a rough year could pressure the payout. Watch the coverage.
The insiders buying suggests they think the debt’s manageable and Foot Locker’s fixable — and they know it better than anyone. Maybe they’re right. But it’s a bet, not a sure thing — and now you know exactly what you’d be betting on.
Which account?
DKS pays a meaningful ~3.5% US dividend, so the account matters. In a TFSA, the IRS skims 15% off every dividend, permanently. In an RRSP, that withholding is waived by treaty. At this yield, the RRSP is the natural home — you keep the full 3.5%.
The point: the best opportunities often wear a “crash” label — the trick is telling a fixable stumble from a broken business. As Warren Buffett put it, “whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down” — and Dick’s sells both. The fastest tell that it’s the quality kind of markdown? Where the people who run it put their own money. My app pinged me on the volume, showed me the insiders buying, and ran the numbers. It won’t decide for you — but it’ll put the right stock in front of you at the right moment, eyes open.
Free — including the live insider-activity feed I used — then run any US or Canadian stock you like.
Curtis Travis is a retired AACI appraiser (B.Comm, P.App) and founder of Travis Valuation. He owns shares of DKS. Figures via Financial Modeling Prep, as of the Sep 4, 2026 close; they move. Informational only — not a recommendation, and not tax advice. Do your own diligence.