Trade-Ideas LLC identified Sturm Ruger ( RGR) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Sturm Ruger as such a stock due to the following factors:

  • RGR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.2 million.
  • RGR has traded 185,456 shares today.
  • RGR is down 3.3% today.
  • RGR was up 8.5% yesterday.

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More details on RGR:

Sturm, Ruger & Company, Inc. designs, manufactures, and sells firearms under the Ruger trademark in the United States. It operates in two segments, Firearms and Castings. The stock currently has a dividend yield of 2.5%. RGR has a PE ratio of 19. Currently there is 1 analyst that rates Sturm Ruger a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Sturm Ruger has been 288,500 shares per day over the past 30 days. Sturm Ruger has a market cap of $1.1 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of 0.06 and a short float of 11.6% with 4.14 days to cover. Shares are up 4.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sturm Ruger as a buy. The company's strengths can be seen in multiple areas, such as its 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. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 26.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • RGR has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, RGR has a quick ratio of 2.01, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • STURM RUGER & CO INC has improved earnings per share by 49.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, STURM RUGER & CO INC increased its bottom line by earning $3.22 versus $1.91 in the prior year. This year, the market expects an improvement in earnings ($3.78 versus $3.22).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Leisure Equipment & Products industry. The net income increased by 50.1% when compared to the same quarter one year prior, rising from $15.50 million to $23.28 million.

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