Editor’s Note: Hedge fund legend who delivered a 279% return on cash in 2025 and went on a 20 year winning streak, says Elon Musk is now executing the “Final Phase of his Master Plan”… and he’s identified the ONE ticker that stands to benefit most (it’s not SpaceX, Tesla, or anything you’d associate Elon with). Click here to see the details.
Dear Reader,
The SpaceX IPO made headlines around the world.
But Larry Benedict — the hedge fund legend who went on a 20-year winning streak — wasn’t watching the IPO.
Lauren Wingfield
Managing Editor, The Opportunistic Trader
P.S. Larry says in over 40 years of trading, setups this clear are rare… and this is one of them. Click here now.
Today’s editorial pick for you
Dick’s Sporting Goods: Powerful Catalysts Could Unlock Major Upside
Posted On Aug 10, 2026 by Ian Cooper
Dick’s Sporting Goods (NYSE: DKS) could have more room to grow as the company continues to improve its business and works to turn around Foot Locker, according to Wells Fargo.
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Helping, the firm just upgraded the stock from Equal Weight to Overweight, signaling that analysts now believe the stock offers an attractive opportunity. Wells Fargo also raised its price target from $220 to $240.
Analyst Ike Boruchow said Wells Fargo has become more optimistic about Dick’s long-term prospects. Rather than focusing only on the company’s upcoming quarterly results, the firm is looking at what could happen over the next several years. “At current levels we are buyers of the risk/reward,” Boruchow said in a note to clients, adding that Wells Fargo believes Dick’s is developing a strong multi-year growth story, as quoted by CNBC.
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One of the biggest reasons for Wells Fargo’s optimism is Foot Locker, which is now owned by Dick’s Sporting Goods.
Foot Locker has been working through a major overhaul of its business strategy. The company is remodeling stores, improving relationships with vendors and making its products more visible across different sales channels, including its stores and online platforms. Wells Fargo believes these changes could eventually help Foot Locker significantly improve its profitability.
According to Boruchow, Foot Locker could potentially return to operating margins of 7% to 8% over the next several years. Better product allocation and merchandising are expected to be important parts of that improvement.
Dick’s Could Also Benefit from Nike
Wells Fargo sees another potential catalyst for Dick’s: Nike.
Nike has been working to turn around its business after a difficult period marked by weaker demand and changes in its product and sales strategy.
Because Dick’s is one of the largest sporting goods retailers in the United States, a successful Nike recovery could benefit the company. Wells Fargo believes Dick’s could be one of the better ways for investors to gain exposure to a future improvement in Nike’s products and sales.
Boruchow said early checks on Nike’s product pipeline for spring 2027 have been encouraging.
If Nike launches products that perform well with consumers, retailers such as Dick’s could see stronger demand. That could create another boost for Dick’s sales in the coming years.
Investors Are Already Seeing Some Improvement
Dick’s Sporting Goods’ latest results also provided some encouraging signs.
Dick’s reported first-quarter revenue of about $5.17 billion, or a 62.6% increase from the same period a year earlier. Revenue also came in about $100 million above analysts’ expectations.
Adjusted earnings per share were $2.90, which was slightly below the $2.91 expected by analysts. More importantly, the company raised the low end of its full-year 2026 comparable sales outlook for both Dick’s and Foot Locker.
Dick’s now expects comparable sales growth of 2.5% to 4%, compared with its previous range of 2% to 4%. Foot Locker’s comparable sales outlook was also increased, with the company now expecting growth of 1.5% to 3%, up from 1% to 3%.
The Bottom Line
With Wells Fargo now bullish on Dick’s Sporting Goods, with a $240 price target, Wells Fargo believes the company’s transformation is still in its early stages. The key question for investors will be whether Dick’s can successfully execute its plans and turn these investments into stronger sales and profits over the next several years.
Today’s editorial pick for you
How to Use Expected Value Calculations to Trade Walmart (WMT) Stock
Posted On Aug 11, 2026 by Joshua Enomoto
I made a mistake in my last StockEarnings.com article for Walmart (NYSE: WMT). It’s not so much that the published idea of the 116/118 bull call spread expiring Aug. 14 is unlikely to end up in the money (ITM), although that would be considered a miss. Rather, it’s that I failed to incorporate an expected value (EV) calculation as part of the overall analysis of WMT stock.
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No, implementing an EV analysis wouldn’t necessarily have saved the options-based idea. As everyone knows, the future cannot be determined — especially in a reflexive environment like the equities market. That simply means that WMT stock will respond to outside influences, including difficult-to-ascertain psychological ones. Therefore, any forecast about Walmart or any other public security is bound to be probabilistic.
Now, I must say in my defense that my idea — published on July 22 — wasn’t without merit. On that day, WMT stock closed at $109.33. At the time of writing, I was using data from July 17, when the ticker closed at $114.24. So, the idea of Walmart stock hitting $118 at the end of Aug. 14 wasn’t far-fetched.
In addition, the breakeven price of the above bull spread was $116.97. On July 28, the intraday high for WMT stock was $116.03. In the article, I stated that my inductive model pointed to a probability of profit (breakeven) at 53.6%. Black-Scholes assigned odds of 36.9%. At this point, it would seem that the truth will be somewhere in the middle.
Still, despite the potential loss — there are still a few days remaining to expiration — I do feel justified in presenting the idea. I wasn’t making an outrageous claim and Walmart stock did break into the $116 level within the expected time period.
Nevertheless, I think an EV calculation would have allowed me to consider alternative debit spreads. It’s not that I questioned the bullish call — in that sense, I was right to be optimistic. However, I am most likely wrong in the specific choice of bullishness.
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Let’s restart the narrative and focus on the current picture. In the last 10 weeks heading into Friday’s close, Walmart stock printed four up weeks, leading to an overall downward slope. Basically, there is an order flow imbalance dominated by bearish sessions. Under this specific 4-6-D quantitative sequence, we would expect a forward 10-week outcome that is positively variant compared to a random, aggregate hold of WMT.
Now, under this framework, in the second week following the flashing of the aforementioned signal, the median endpoint outcome is around $113.50. That is, of the 28 times that the 4-6-D sequence has flashed on a rolling basis since January 2019, WMT stock has exceeded the $113.50 level 14 times and has fallen short of this level 14 times.
Since week 2 coincides with the Aug. 21 expiration date and that this particular options chain is denominated by single dollars, the highest-probability strike price that offers the greatest reward, along with the least dollars at risk, would be the $113 strike. As such, I would be most interested in the Aug. 21 112/113 bull call spread if I were approaching this trade from a rational perspective.
However, if WMT stock rises through the second-leg strike at expiration, the maximum payout would only be 81.82%. So, from a net debit of $55 to enter the trade, the maximum nominal profit would only be $45. Initially, this dynamic would seem to doom the transaction to a negative EV. And it’s at this point where many retail traders are tempted to consider a higher strike, say $14, to push the max profit ratio to beyond 100%.
But let’s do some quick math here. Under the above inductive model, WMT stock would be expected to hit the $113 strike on Aug. 21 57.1% of the time. Out of the 28 times that the 4-6-D signal has flashed, WMT has risen above $113 a total of 16 times on week 2.
So, in 57.1% of the time, the 112/113 bull spread would be expected to pay out $25.70 ($45 x 0.571). Out of the other 42.9% of trades, the spread would be expected to lose $23.60 ($55 x 0.429). While the win margins aren’t phenomenal, you’re still expected to win about $2.11 over the long run.
Why Not Take a Greater Risk?
This might raise an intuitive question: why not take a shot with a greater risk-reward play? If you look at the 113/114 bull spread (also expiring Aug. 21), the maximum payout is 112.77%. Nominally, you’re betting $47 to make a maximum profit of $53. Since $114 isn’t that far off from $113, this trade might seem to be the better bet.
To be fair, since no one knows the future, it could be an intriguing idea. Moreover, if Walmart stock does drive up to $114, you would be capping your reward potential by going with a $113 bull spread. That is always going to be an inherent risk with options spreads.
However, we’re just playing the numbers game. In my model, whenever WMT stock has flashed the 4-6-D signal, the ticker has only risen above the equivalent of the $114 strike on Aug. 21 a total of 12 times. You’re looking at a 42.9% success rate, meaning that you would be expected to win $22.74.
But because the success rate is relatively modest, this mathematically means that you’re losing 57.1% of the time. And that translates to nominally losing $26.84. Over the long run, you are expected to lose $4.10. Subsequently, we would label the 113/114 bull spread as having negative EV.
Does This Guarantee Victory?
Unfortunately, even if we run an alternative model and we do EV analysis, we still cannot guarantee a positive outcome for the above trade. I must stress this over and over to properly set expectations: the equities market will always be a game of probabilities.
All I’m doing is trying to narrow the risk down. However, no one can eliminate all risk. Further, the model itself could be wrong for that particular trade due to a number of unforeseen reasons. All inductive approaches suffer from the potential risk of the black swan. If you can’t handle this reality, options are not for you.
However, I also don’t have a nihilistic approach to the markets where we just throw our hands in the air and just accept hedge fund dominance. I believe that through creative approaches — such as inductive analyses — we can help level the playing field.
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