I focused on Sturm Ruger (RGR), a small-cap company headquartered in Southport, CT. The stock was trading at $29.50 at the time. I also owned a large position for my clients who are aggressive growth investors.
The stock stormed higher in the ensuing months, and finally topped out at $58.42 per share on May 2, 2012. I eventually sold the stock on May 11 at $50.21 for a very healthy profit. The stock finally broke down below its trend line, and it was time to move on.
The stock went into a down trend that finally ended in early June at a price of $34.22. The stock has been back in an uptrend ever since. The fact of the matter is that the stock had gotten way ahead of itself and was overdue for a healthy correction.Now that its correction is over, and the stock is back in an uptrend, it is definitely time to analyze it again. I like to begin by looking at the performance of the stock:
As you can see, the stock has delivered superior, albeit a bit volatile, returns to investors over the years. Its 10-year track record is superb, as are its five-year, three-year and one-year returns. The stock has been delivering alpha for a long time. Also, notice the stock was up 10.4% while the market was down 38.5% in 2008. It should be noted the stock has just gone through a correction of 40%, however. Sturm Ruger is not a low-beta stock, but the returns have been well worth the volatility that is inherent in the stock. When I compare the stock to just over 2,800 that I follow, it earns a relative performance grade of "A." This puts it in the top 7% of all stocks from a short-term, intermediate-term, and long-term basis.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV