Smith & Wesson Stock Soars

“Shares of firearms maker Smith & Wesson Holding Corp. hit a new 52-week high Monday after a Wedbushanalyst said that gun sales are rising on worries that President Barack Obama may tighten gun laws if he is reelected.” I don’t think that means what they think it means. At best, the Prez could tighten federal regulations via his (but not our) good friends at the ATF. Anyway, finance.yahoo.com identifies “THE SPARK: Wedbush analyst Rommel Dionisio reiterated his ‘Outperform’ rating on the stock and raised its price target to $10 from $7.” And now . . . THE BIG PICTURE . . .

Smith & Wesson’s rivals are also seeing higher demand for guns. On March 21, Sturm, Ruger & Co. Inc. said that it has received orders for more than one million units, forcing it to stop accepting new orders until it can catch up. Smith & Wesson might be able to gain more market share from Sturm, Ruger & Co. while it halts new orders, Dionisio said.

Huh? Smith & Wesson’s handgun production is also maxed-out. More to the point (money and the making thereof), Smith can’t sell its Perimeter Security Solutions business for love or money. It continues to be an enormous drag on profits.

A fact that somehow doesn’t get much attention in Smith & Wesson’s March investor presentation. (Click here for the pdf.) If Smith ever manages to unload that turkey, look out world!

THE ANALYSIS: Besides higher sales, Dionisio said Smith & Wesson’s new handgun could help boost its stock.

Like S&W needs another skew. Anyway, we’ll be at NRA for the launch. And lunch. On our nickel methinks.

comments

  1. avatar Aharon says:

    Guns are over-priced. Knives are over-priced. Manufacturers continue to use more cheaper parts and let QC slip. F-them.

    1. avatar Milsurp collector says:

      When in doubt, go the milsurp route.

      1. avatar Chris Dumm says:

        Every time an old milsurp rifle gets taken to the range, an angel gets its wings.

        1. avatar CarlosT says:

          “It’s true that every time you hear a bell, an angel gets its wings. But what they don’t tell you is that every time you hear a mouse trap snap, an angel gets set on fire.” – Jack Handy

  2. avatar BLAMMO says:

    I guess most investors who are inclined to invest in a gun manufacturer figure they missed the boat on Ruger, so they’re going for the next best publicly traded company.

    1. avatar APBTFan says:

      In the next few months it may very well pay handsomely.

  3. avatar Dale says:

    Well.. Smith’s new stuff is okay I guess but I find myself wishing they’d do a run of some of the older designs, especially the 1006!

    1. avatar APBTFan says:

      I wish S&W would put the 1006 back into production. The prices of used ones are ridiculous.

  4. avatar Pascal says:

    IMHO, the QC of everything is slipping and prices are rising so it may be cheaper to purchase older stuff.

    Its not just S&W and Ruger stuff that is hard to get, even scope rails by Weaver are becoming hard to find.

    I do not believe it is Obama fear alone that is driving this, but it is real that supplies are low and prices are going to increase. Add to this inflated shipping costs due to fuel costs, and there will be across the board increase in all firearms related items because these things tend to be big, heavy and bulky.

    I would be surprised to see near $5 gas as we get closer to memorial day which will make more people to be scared of an impending doom — which will drive more sales — ammo prices even 22lr will rise again I am sure.

  5. avatar Sanchanim says:

    I like S&W, so good to hear they are doing well.

  6. avatar koolaidguzzler says:

    Another example of how gun owners as a group can look like paranoid alarmist morons. Just like the 2009 panic after the election, the only winners are the gun and ammo vendors. The losers? Gun owner suckers who swallowed that scare.

    1. avatar Tim says:

      Keep guzzling the Obama koolaid & you’ll see who the ‘sucker’ is when you look in the mirror on 05 November.

      The American people “get it”. A lame-duck president with 4 more years has no reason *not* to pursue every progressive objective since Wilson.

  7. avatar bontai Joe says:

    I’m glad to hear that S & W is doing well. Glad that Ruger is doing well, I hope all firearm manufacturers are making money. I remember all too well the way that a group of asshats like the mayor of New York tried to bankrupt the firearms companies with frivolous lawsuits just a few years ago.

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