Why is this stock trading up so much higher than a few weeks ago?
I see that it has a really weak comp for this quarter approaching, but I see no justification for the current price based on the trailing 3 quarters earnings results. I mean a cumulative 9 cents per share over 3 quarters and book value of 2.70$ per-share doesn't seem to justify the price jump alone (In my opinion).
Why is all the buying taking place?
Disclosure: I currently have no position in SWHC.
LOL...this is fun. I like it that little pink revolvers are being sold to the ladies. I also like the idea that this may just be the little engine that could...LOL that's my story and I am stickin' to it...Ladies like big guns!!
I've been in SWHC since the 2's.....
Trading volume for December was much higher than for November, and , according to the Nasdaq website, it really has not gone down much in January:
We bounced nicely off the 10dma.........
Days to cover has gone down from 8.6 in November to 2.1 in January....... There's anemic short interest, for a reason.....
In addition to all the reasons offered I would like to suggest that guns and the world around it are like Nascar...... It's a growing cultural phenomenon and it's BIG....This same force took Ruger's share price from $5 to $40 in three years (on above average volume today).
IMHO, I don't see any reason why SWHC could not be at $40 in three years..........
Long and strong,
On the long-side momentum can carry you a long way, which it has already gone up a heck of a lot.
Revenues for the trailing 4 quarters are 385M, but that's actually lower than the 406M for fiscal year 2010 by 5.1% and it's also lower than the 392M reported for fiscal year 2011. At any rate, it appears to me that revenue growth is not, and will not see significant improvement in the foreseeable future.
That leaves improved profit margins as the only area for improved profitability in my view, which it appears management is addressing by factory consolidation.
It appears to me that trading volume is getting lower as this has risen, and that often indicates that a price correction may be coming.
By the way Lu, are you on the CBIS board too? SWHC and CBIS are the only two stocks I've been following closely the last month or so so it's weird to see your login on that board too. Got in on CBIS at .015 and got out at .05 - took my 200%+ profit and ran. Time will tell if I got out too early.
No one said to buy the stock because it's gone up 75%. I've just made that much so far. As a matter of fact, I would have taken profits 40-50% ago if I didn't think this stock would continue to rally through the end of the year.
Also, the Mayan Apocalypse scenario is an event that will move the stock upwards - whether I believe the hype or not. Why? Because enough investors will perceive that a group of "irrational" people will be purchasing supplies like fire arms in anticipation of the event.
Furthermore, if you take into account that record numbers of people are buying guns these days, you have the right recipe for a stock that will continue to rise.
Feel free to disregard my opinion, as that is all that it is. However, I see little reason for this stock to decline and many reasons for why it will continue to climb.
I would be more likely to initiate a short position than buy the stock to be honest, but I doubt that I will because I don't know the fundamentals well enough, and this is a cheap enough stock that a short position could be pretty dangerous.
I just find it awfully concerning to hear the justifications from some of the longs that are buying the stock. Like "It's run up 75%..." and "Mayan apocalypse (that I don't even believe will happen)" and, and, and...
If the Mayans knew what was going to happen going forward then why was their civilization wiped from existence? lol I wouldn't put much weight on their prognostications.
To me it looks like the main reasonable buying motivation is that SWHC will be facing an extremely weak comp, but I see that as a "Buy the rumor, sell the news" type of event that could send this back down to 2.50-3.00$ A.K.A. back to somewhere around book value (which would still most likely be a high earnings multiplier even at 2.50 per-share)
It's had a very nice run-up and probably if you weren't able to pick up shares in the high 3's or low 4's you should wait until there's a pullback.
Since the fence division has essentially been written off and is no longer part of the reporting any funds from a sale would be welcomed.
The closing of the bribery issue would also be advantageous moving forward.
"BTW... are people really using the Mayan apocalypse as a justification to buy this!??"
I did, and I'm up 75% in two months. Of course, that might just be dumb luck. My contention is (and has been) that as we get nearer to December 21st, 2012, the media hype for the Mayan Apocalypse will kick in to high gear. It will be discussed EVERYWHERE - it seems like it already is - and this will result in a some people stocking up on supplies like canned goods, prescriptions, and guns.
Now, I'm not saying anything is going to happen that day (as a matter of fact, I'm sure nothing will), but the perception that a portion of the population is buying these goods should push the stock price higher.
I've actually put up links on this board a few times with interviews from analysts at large investment houses echoing these sentiments - but dont' forget...I said it first! :)