This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Guns Are Still Better Than Gold

NEW YORK ( TheStreet) -- I wrote an article back on August 21 of last year about the fact that gun stocks had been outperforming gold stocks by a wide margin.

I focused on Sturm Ruger (RGR - Get Report), 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.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
RGR $49.11 -1.00%
AAPL $124.07 -0.29%
FB $81.31 -1.10%
GOOG $540.75 -1.30%
TSLA $187.49 -0.68%


DOW 17,671.56 -104.56 -0.59%
S&P 500 2,059.18 -8.71 -0.42%
NASDAQ 4,870.9490 -29.9360 -0.61%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs