This Day On The Street
Continue to site
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

Smith & Wesson Scores Another Perfect Round

NEW YORK ( TheStreet) -- Smith & Wesson (SWHC - Get Report) reported bull's eye earnings on Tuesday. From an investor point of view, it's hard to ask much more of the management team that has effectively turned the Springfield Company into a money printing press.

The fourth quarter ending April 30 resulted in doubling net income to $25.2 million from a year earlier. Smith & Wesson hit the target with a record $178.7 million in revenue. Amazingly, the profits would have been greater if the company could keep up with incoming orders. Smith & Wesson salespeople may have the best job in the world right now.

Demand for product isn't waning, and production capacity is the only bottleneck based on comments made during the earnings conference call.

CEO, President James Debney stated:

"...gains over the year were driven by strong consumer demand for our products, which we believe is due to heightened awareness paired with our ability to significantly increase our manufacturing capacity. Full year sales growth of nearly 43% was driven in large part by our increased M&P production. Demand remains strong across our product portfolio...
"While we significantly increased our production capacity in fiscal 2013, we remained capacity constrained as we have in the past five quarters. We plan to continue intelligently increasing capacity in fiscal 2014.
"...Sales for the quarter rose 37.6% year-over-year. Gross margins in the high 30s continue to expand ..."

While it's true I own Smith & Wesson (SWHC - Get Report) and Sturm, Ruger (RGR - Get Report) firearms, it's a mistake to believe I'm bullish either stock as a result. In my article Canon Continues to Lose Focus I go into detail of why I don't use personal preferences in my stock buying decision process.

With that said, I am highly bullish and have owned shares in Smith & Wesson from time to time and/or sold put options for a synthetic bullish position. If this company didn't manufacture firearms and sporting related products, I believe the stock would be more than triple the current price. Wall Street isn't the biggest Second Amendment fan, and their reluctance is your window of opportunity.

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
Only $9.95
14-Days Free
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 $54.46 0.00%
SWHC $15.21 0.00%
AAPL $124.75 0.00%
FB $80.78 0.00%
GOOG $524.05 0.00%


DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs