The stock was selling at well under $3 per share as late as November 25, 2011. In early January, it peaked at about $15. It now trades at slightly under $12 a share.
Management can hardly be blamed. The stock looks dirt cheap, with a price-earnings multiple of 8.4. Revenue around 42.5%from 2012 to 2013. It reported net income of $81.4 million out of last year's $587.5 million in sales. (Smith & Wesson reports on a May fiscal year, so the most recent fiscal year ended in April.)
The company is in the process of buying back $100 million in shares, and has a current market cap of $667 million.But it's increasingly likely we have reached peak gun. Quarterly revenue peaked in the fiscal fourth quarter of last year, at $178.72 million, and stood at $139.29 million for the quarter ended October. The company reports its January quarter after the bell Tuesday. guns in their home, from 49% in 1974 to 34% in 2012. Gun ownership tends to be highest among older, white citizens in rural areas, according to the survey, and gun owners skew Republican. Mass shootings and calls for gun-sale restrictions have the perverse effect of causing gun sales to spike, but can Smith & Wesson continue making a growth case based on that kind of fear? (RGR), which is up 600% in value over the last five years, triple the gain found in Smith & Wesson. Sturm, Ruger passed Smith & Wesson in total sales during 2012, and seems to be extending its lead. It reported its Christmas quarter and full-year sales a month ago, $181.9 million for the three months, with full-year sales of $688.28 million. RGR also brings more of its revenue to the bottom line, with net income reaching $26.57 million for the Christmas quarter. Sturm, Ruger recently bought its third manufacturing plant, in North Carolina, to go along with plants in New Hampshire and Arizona. Smith & Wesson's plants are concentrated in New England.
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