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Smith and Wesson profit soars. Stock trades under $10
- Thread starter Deerinheadlights
- Start date
CWulf
NES Member
Not surprised. On one hand you have panic buying that was going to really help their short term sales and profits and on the other hand long term investors are going to be wary of this stock since Obama and many others still have gun control as a major objective. Also, the many people that wanted to buy an AR or one of their high capacity hand guns have now done so. If an AWB of some kind is eventually passed this will hit S&W hard. Right now, there is potential high risk with not a well defined reward for buying the stock... IMO.
I've owned S&W since Feb(?). While it's not a "high flier" the risk/reward for me is fine. I bought them more because they already make MA/CA/MD compliant firearms, and would have minimal re-tooling time if the .gov decides to mirror one of those states with restrictive laws/rules/regulations.....
The shares are enjoying a nice pop in the opening session (5.4%^, just looked at my portfolio) Nice pop, but probably not sustainable for the day. The next few weeks we may see more movement to get closer to a good P/E....
The shares are enjoying a nice pop in the opening session (5.4%^, just looked at my portfolio) Nice pop, but probably not sustainable for the day. The next few weeks we may see more movement to get closer to a good P/E....
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CWulf
NES Member
I might be more interested in it if there was a dividend. It is trading up a bunch today because they gave higher earnings guidance earlier this morning. It will be interesting to see if it can stay up there and more importantly, keep moving up.
I'm using it more as a growth stock. I have plenty of div right now, this is one of my (believe it or not) my more risky plays.
CWulf
NES Member
CoastieRon, another consideration is that some states, Massachusetts among them, are now considering or have passed legislation banning state run retirement and other investment funds from investing directly or indirectly in firearms and ammunition manufacturers. As you probably know, large institutions like state retirement funds and mutual funds are actually responsible for most of the trading volume on the various exchanges and can have an inordinate impact on a stocks performance.
ETA: Yeah, as a short term growth stock it makes sense. You should be happy today with it![[smile]](/xen/styles/default/xenforo/smilies.vb/001.gif "Smile [smile]")
ETA: Yeah, as a short term growth stock it makes sense. You should be happy today with it
So a retirement fund will shortchange its participants tens of thousands of dollars in a stock that has shown profound growth in order to make a point. These people are relying on sound financial decisions in order to live on after retirement, not taking a ride on some touchy-feely moral high horse. This screams fiduciary malpractice.
CWulf
NES Member
Well a state run retirement fund will... welcome to the progressive world of Obama... If you like that wait till Obamacare fully hits next year, we are gonna love it!
Yup. However, this is not unusual. There are "socially just" funds that will not invest in: firearms, coal, fuel, oil, gas, cigarettes, tobacco, booze, beer, etc, etc. But on the other side of the coin, the are "Sin" funds. I like to think of my portfolio as one big "Sin" fund. You know why? Because Sin sells baby. When shit gets tough, what do people buy? Booze, beer and smokes. When things get good, what do people buy? More expensive booze, beer, tobacco.....
When the stock took a hit on the divesting news, I bought more. Industrial/commercial trading and ownership, while definitely an influence on a share's price (especially when it is being sold en-mass by a fund in huge share blocks), doesn't concern me too much right now (still a young 41, not all eggs in one basket, etc, etc.....)
CWulf
NES Member
Hmmm, options... I read somewhere that trading options is a great way to make a small fortune out of a large one.
![[wink]](/xen/styles/default/xenforo/smilies.vb/002.gif "Wink [wink]")
I bought SHWC back in March, only a handful of shares. I didn't buy the stock as any kind of strategy, primarily because I enjoy their products. I own it for the same reason I hold onto a few shares of Eastman Kodak. Their products give me enjoyment.
My adviser always says, "Ron, buy what you know, it seems to be working"........
Nothing wrong with buying something you understand well. I did the same with Boston Beer Company and I did very well with it.....
Exactly. If I were a stakeholder in those funds I would be absolutely pissed. The fund administrators have one job, and only one job: to increase the fund's performance.
glockforlife
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CWulf Excellent analysis. I don't see this as a stock with any long-term growth potential. The lack of a dividend prevents treatment as a value stock. 4th quarter earnings reported on June 25.
KMM696 I have had excellent experience with TD Ameritrade. Superior research tools, great customer service.
KMM696 I have had excellent experience with TD Ameritrade. Superior research tools, great customer service.
![[thinking]](/xen/styles/default/xenforo/smilies.vb/010.gif "Thinking [thinking]")
glockforlife
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In the interest of full disclosure, 
I decided to buy a few shares yesterday on the basis of what looks like strong near-term performance that will exceed analyst estimates.
I decided to buy a few shares yesterday on the basis of what looks like strong near-term performance that will exceed analyst estimates.
I bought some S&W stock and Ruger stock a few years ago more to show my support for the 2A and the shooting sports industry. Actually Ruger has done extremely well.
Having a few shares doesn't cost an arm and a leg and shows support for what we believe in. I didn't add this stock to make money in my portfolio.
Sent from my iPhone using Tapatalk
Having a few shares doesn't cost an arm and a leg and shows support for what we believe in. I didn't add this stock to make money in my portfolio.
Sent from my iPhone using Tapatalk
You have to look at the multiples. SWHC is fairly valued. If you look at its PE ratio competed to RGR, it's about right. The per share price is as much a function of dilution as anything else. S&W was about $2 a couple of years ago, and that was right. The price now is only right if their earnings are good.
The big difference between Ruger and S&W if you look back a few years is that Ruger has consistently increased revenues and earnings, while S&W has grown revenues a lot through acquisitions and higher sales, but their earning have been up and down. In the past there was a lot of concern about how well they were run because they couldn't manage their earnings consistently.
TL; DR version is that just because the stock is cheap doesn't mean it's a good buy.
The big difference between Ruger and S&W if you look back a few years is that Ruger has consistently increased revenues and earnings, while S&W has grown revenues a lot through acquisitions and higher sales, but their earning have been up and down. In the past there was a lot of concern about how well they were run because they couldn't manage their earnings consistently.
TL; DR version is that just because the stock is cheap doesn't mean it's a good buy.
It isn't. Many pension funds are making this decision, and SRI(socially responsible investing) is a growing business. While I agree with your sentiment, pension fund boards all over the world have silly little rules like "don't invest in any company that does business with Iran", or no sin stocks, or index X but no country Y. The pension organization appoints the Board, the board directs the asset manager based on extensive and detailed fund documents, and changes are fairly onerous. But weird little clauses and restrictions are common.
Smith and Wesson Holding Company announce share buy back:
https://east-myservice.broadridge.c...13/E76433/831756101/c/index.html?id=&expire=1
I got the email at like 4am this morning. Considering my buy in is $8.65 (dollar cost averaging), I don't stand to make too much on this @ 500 shares, but it is a profit. I think I am going to hold for a while, considering they reported stellar earnings with pretty good forward looking guidance....
https://east-myservice.broadridge.c...13/E76433/831756101/c/index.html?id=&expire=1
I got the email at like 4am this morning. Considering my buy in is $8.65 (dollar cost averaging), I don't stand to make too much on this @ 500 shares, but it is a profit. I think I am going to hold for a while, considering they reported stellar earnings with pretty good forward looking guidance....
This should drive the shares up in the long run. It means that they think that the shares are too diluted, and/or they don't have any place else to put money right now, and/or they are rewarding shareholders in a way that isn't paying dividends, which is now a horrible way to take stock profits vs long term cap gains.
Watch to see how well received this is to get an idea what people are thinking.
Watch to see how well received this is to get an idea what people are thinking.
Taking shares out of the market is generally considered a good thing. I see it as a reward without paying the dividend, but it would be better if they paid out. Perhaps there is a long term plan, buy shares back, then in the next fiscal year announce a dividend program. Killing the dilution means paying out less, no?
And now it is giving up yesterday's gains.
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Hmmm, options... I read somewhere that trading options is a great way to make a small fortune out of a large one.
That is true but there are ways to use options very conservatively and make a good return.
inerlogic
NES Member
Stock:Smith & Wesson Holding (SWHC)
They boosted their buy back price to $11 a share. Up 8.2% in last 5 sessions.....
They boosted their buy back price to $11 a share. Up 8.2% in last 5 sessions.....
still climbing...
