Dean, Lance, Dick

--In a surprise announcement this afternoon, State Representative Dean Newton
announced that he is resigning from the State Legislature. From my
perspective Newton was one of the few true "moderate" Republicans. In a
party often torn between vocal minorities on the religious right, and equally
vocal (and even more minor) pro-choice Republicans, Dean Newton seemed to be the
moderate middle ground. Fiscally conservative, socially a reasonable human
being, and in person charming, Newton was what a Republican legislator should
be.

Dean Newton will be stepping down to spend more time with his family, this makes a lot of sense with young children at home.

If we needed a reason to get the party all stirred up again, we have just found it. By this afternoon there were reportedly already cerebral people already staking out a position in the 21st legislative district.

--In other news, Lance Armstrong is holding onto the lead in the Tour de France. Armstrong is an inspiration to all cancer patients and survivors. It is a testament to the scientists and doctors, as well as the determined patients who have made cancer a disease that can be overcome, a disease that can be beaten, and then a disease whose conquest can be motivation for a more powerful life after cancer.

Good Luck Lance, we are all cheering for you.

--In financial news, I just finished an analysis of Dick's Sporting Goods. I will publish a full report later, but here is the quick and dirty. Dick's is a nice regional retailer, with a great regional going national story. Currently the company has 236 stores, and plans to grow its store base by 15% per year.

The company trades at a P/E around 38, more than a little rich compared to other retailers. Dick's doesn't seem to manage inventory as well as some other retailers, but generally seems to match up pretty well with the retail industry.

The growth story is attractive until you really start to run the numbers. Taking into account the capital expenditures Dick's expansion plans will require, the stock would seem fairly valued at about $25 per share. The stock currently trades at $38 per share, substantially over valued.

However, there doesn't seem to be a clear catalyst to bring down the share price. The company will continue to grow it's store base, and Dick's has some vocal fans in the media. Stay away from the short, but don't add this one to your portfolio either.

Timothy Burger

timothyb {at} timothyburger.com