I've been giving the preannouncement of earnings by SWHC a lot of thought the last week or so while keeping an eye on the stock price. Something just doesn't feel right in terms of there being a leak leading to the company making the preannouncement which was my original theory. I'm starting to think that there's going to be a game changing announcement made next Tuesday....it could be the outright sale of the company or privatization of it, an acquisition, something really, really big....something that made the company want to get the 'regular' news completely out of the way early (earnings, $10 per share tender offer for up to $100 million dollars worth of stock). A sort of clearing the plates from the table announcement to get ready for dessert.
This is STRICTLY an educated guess based on the announcement and how the stock has been trading in the face of severe headwinds but again...I'm starting to think there's something big coming down the tracks and I'm investing accordingly. There's no reason we shouldn't be going through the 52 week high considering the continual growth rate and perhaps 'earnings' next Tuesday will be that trigger.
Sentiment: Strong Buy
I totally agree with you, and have been thinking the same thing since the delayed the earnings announcement, by backing it up another week. It really does feel like something is going on.
Even though we ended the day down it wasnt too bad a day. We would have been slaughtered if it was not for earnings coming out.
Sentiment: Strong Buy
Of course. It can't go down much below $10 until next Tuesday. They would have to guide lower, which would be quite remarkable since they are selling everything they make right now. I believe this was a strategic ploy to stop a hostile takeover. They have to do something really stupid to keep next qtrs. earnings from being really good, too. The only way for SWHC to stop a hostile at this point is to over pay for an acquisition. Maybe a hostile can stop that before it happens. It requires shareholder approval. This is a public company folks, and way, way, way undervalued while their products are sold a year in advance. Think about what makes sense. If it doesn't make sense, it isn't true. The shorts are in trouble and the MMs are in desperation mode. Don't kid yourselves on what is now totally obvious.
I agree that there could well be an announcement of an acquisition (which could be viewed by the market either positively or negatively). But I doubt there will be announcement of a privatization or anything which sets a value on shares of SWHC. If there was to be anything like that, then they would not have announced the $10 tender.
Chelon...not sure what you mean about a 'leak'. Please elaborate.
I agree that there may be some news in the near future on this company. There could be a third party offer coming in. After giving it some thought, i doubt that the tender offer was a defensive move vs a hostile offer. I do think that it's a genuine effort to use excess cash and reduce share count. Debney got his 100,000 share grant a few months ago, so i think they are prepping for a sale and gave debney his future grants ahead of time. The primary problem with swhc valuation is management as we've discussed the financial similarities at length. Its time for turnover there. A buyout would solve that problem and unlock value.
Golden has options that expire soon. Quite a bagful in fact. He won't max his return by sitting on his hands. He is going to want the stock to go to max value before he cashes in his chips. The best time to sell a deal like this us at its peak, like now. And while money is cheap.
Not trying to be a Buttinski, but I assumed by "leak" he meant they pre-released earnings because they feared a leak or knew of one. I know that was a popular explanation for the pre-release when I started a topic asking for theories on why they would pre-release earnings.
That's exactly what I'm confused over... "There's no reason we shouldn't be going through the 52 week high" ... I would think the stock price would follow earnings and trade at those levels, but no, what is keeping it down???
Sentiment: Strong Buy
My suspicions as to why we aren't at the 52 week high.
1. The mistaken belief that gun purchases are a one and done event when in fact gun ownership is climbing with no end in sight (due to higher disposable incomes, pent up demand, political changes, and most importantly a social change regarding guns (its become cool in certain circles to own the latest and greatest toy))
2. Shorts/politically sensitive longs who drove the price down but who are gradually heading for greener pastures (like SPY the last few days- lol)
3. People move in herds
This being said, with the continual incredible growth rate, a PE that keeps shrinking, a decreasing float, political pressure that is nearing the end, the 100/$10 floor by management.....it's going to revisit and blow through it's 52 week high (and that's assuming someone doesn't take it out for the cash cow that it is before that).