NEW YORK ( TheStreet) -- Not every stock an investor owns is in the precise kind of business where the majority wants to invest.Right now not even the most popular stocks with the most popular products are setting new stock price records. Looking at my personal portfolio I noticed Apple ( AAPL) was down again while one of my "flat-line" holdings, NYSE Euronext ( NYX) was up 33% on news Intercontinental Exchange ( ICE) has made an offer. All I can say is "go figure!" I sold my shares of NYX at $32.17 Thursday and I won't look back. Back on Nov. 2 I recommended in investors begin accumulating NYX when it was around $25.30 per share. Just to keep me humble the stock proceeded to correct and hit an intraday low of $22.25 on Nov. 14. Even a broken clock is right twice a day so seeing NYX ascend above $33 Thursday seemed like cruel irony, considering the Mayan calendar supposedly tells us that the world as we know it will be ending today. As Shakespeare wrote in Hamlet, there's a time when every investor suffers "the slings and arrows of outrageous fortune" and asks that ambivalent question, "To be or not to be?" Before I get too eloquent, there's another investment theme unpopular right now and has some negative feelings attached. With the recent tragedies each involving what appears to be one rogue gunman wreaking havoc, the idea of investing in firearm companies isn't a very popular one. Putting emotions aside, one can't help notice a monumental demand for firearms and ammo. One headline sums it all up: Guns Sold Out at Wal-Mart as Ammo-Magazine Sales Surge. That may indicate a good buying opportunity for WMT and EBAY, but from my perspective it opens the way for a better investment idea with Sturm, Ruger ( RGR). In the aftermath of the November elections and the recent mass tragedies there's obviously a kind of anti-crime, pro-2nd Amendment to the U.S. Constitution surge. One friend told me recently he went to Dick's Sporting Goods ( DKS) to buy some hollow-point bullets for his target pistol and was told they'd been sold out for two days. When asked when new supplies would arrive the salesperson said, "Soon, we hope."
While you wait for the share price to regain its former heights (shares tumbled to a low of $40 after the tragedy in Newtown, Conn.) you'll be earning a $1.53-a-year dividend, which represents about a 3.56% yield-to-price if shares are purchased at $43. This is from a company with no debt, total cash (most-recent-quarter) of over $105 million and a dividend yield which represents a sustainable payout ratio of only 34%. It appears the fear of new gun-control legislation and possible limitations on gun and ammo sales has been depressing shares of Sturm and Smith & Wesson ( SWHC). Those fears are overblown, in my opinion, and the daily evidence is both companies are seeing sales skyrocket. What do you think that will do for EPS and revenue during the current quarter? The answer is self-evident. The share price of SWHC has retreated to levels we haven't seen since last summer. This in spite of the company's skyrocketing quarterly revenue-per-share and its diluted EPS growth. Again, let the chart give you the powerful picture. SWHC data by YCharts
Smith & Wesson's price as of Thursday is only $8.25, which represents a trailing PE of less than 10 and a forward (one-year) PE of less than 9. Its price-to-earnings-to-growth (PEG) ratio has dropped to 0.35, an indicator that SWHC is quite oversold.