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Why Cramer Won’t Buy This Retailer

Monday, 24 Oct 2011 | 6:42 PM ET
Time to Take Profits from DKS?
Just because a company has compelling long-term prospects is not a reason to buy the stock, says Mad Money's Jim Cramer. Go with something that's doing better right now, like VF Corp or Deckers, if it sells off after it reports on Thursday.

Just because a company has compelling long-term prospects, it is not the sole reason to buy the stock right now, Cramer said Monday. Case in point—Dicks Sporting Goods.

Dick’s has begun to accelerate new store openings and Cramer thinks there’s room to grow. Plus, new stores have been performing better and the company a terrific balance sheet.

However, it all comes down to timing, he said. The stock has run up from $30 to $39 and change.

“There’s not a lot on the horizon to make me think it can still power higher,” Cramer said. “In fact, things seem to be getting more difficult for Dicks.”

The company is facing tough comparisons in the second half and is having some trouble with the competition. As more companies like Nike and Under Armour sell their products directly to the consumer, Dick’s is losing share.

So while the long-term story might be good, Cramer doesn’t think there’s much reason to get behind Dick’s in the short-term.

“I say this one is too hard,” Cramer said. “I want you to take profits if you own Dicks, and go with something that's doing better right now, like VF Corp or Deckers Outdoors if either sells off. That's the safer, better play."

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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