Smith & Wesson (SWHC) Stock Gains on Crimson Trace Acquisition
NEW YORK (TheStreet) -- Shares of Smith & Wesson (SWHC) are advancing by 0.61% to $29.55 Monday morning, after the company announced it will purchase the laser sighting system manufacturer Crimson Trace Corp. for $95 million using cash on hand.
The Springfield, MA-based gun manufacturer said Crimson Trace has served as a "key supplier" of laser sight and tactical light products for Smith & Wesson. Crimson Tide will be the "ideal platform" for its Electro-Optics Division, the company said in a statement.
The acquisition is slated to close in three to six weeks, Smith & Wesson noted. After the closing date, the company expects the purchase to be accretive to Smith & Wesson's earnings in 2017.
In the year ended April 30, Smith & Wesson firearms sales rose 24% to $657.6 million, the Wall Street Journal reports.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate SMITH & WESSON HOLDING CORP as a Buy with a ratings score of A-. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
You can view the full analysis from the report here: SWHC
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