That worry isn't bearing out at the moment, since treasury rates are up pretty big today in a flight to safety.
How 'bout that flash crash at the open? How does that even happen that someone can sell or buy way way way below the highest bid? I wonder if the SEC even investigates this sh** or if they just yawn,.
That's a good thing. They are operating more lean by delaying or cancelling purchase orders for capital equipment and are using their existing equipment in a more efficient manner by putting it where it will be most productive for them with respect to revenue and earnings. I think you misunderstood.
PS: For comparison RGR annualized (normalized) EPS growth rate over that time span is +42.9% and Rev growth is +33.4%. This is vs normalized Adj. NICS growth of +4.8%.
For the trailing 4 quarters vs the trailing 4 qtrs from 2 yrs ago, the annualized Growth Rate of the Adj. NICS is +4.8%. This is probably pretty close to a normalized growth rate for industry wide gun demand. Doesn't make sense to punish a company for experiencing a windfall surge. By definition, nobody expects a surge to continue. It has a finite lifetime after which growth normalizes. Since S&W and RGR typically are taking share from the other companies, they will continue to experience growth rates that exceed that, going forward. Share buybacks will help that even more.
Maybe its a radical thought but I've often wondered if some of the rabid shorting of the stock might not be banksters who are determined to punish RGR for refusing to play the game and take on debt.
It was also because they refused to discount heavily like their competitors. That may have been a mistake.
"You are making the mistake of thinking he did not know demand was going to surge on Dec. 31 2012. "
Now you're putting words in MY mouth too. He certainly knew that demand was surging, but he didn't know how much or how long it would sustain itself. It was an unprecedented event and depended a great deal upon what the politicians did. He had no way of knowing that Q4 '12 thru Q3 '13 earnings growth would sustain itself and be +68.9%. You seem to think everyone has a crystal ball lol lol!
What I said was that at the time of the buybacks sometime in Q1 2011, he could not have known that earnings would spike +71.3% in the following year.
"he could have bought the stock back every day of the year if his metric was the S&P500."
Not true at all, this stock has been extremely volatile. Just for example, on 5/1/12 close of 55.14, RGR had a ttm P/E of 22.4 and a forward P/E based upon final estimates (right before earnings releases) of 16.0. Since the analysts revised their estimates upward, the actual value was even higher than that.
I see you putting a lot of words in his mouth there, especially when you start throwing out pps figures. I agree that he is not particularly concerned with supporting the share price and he takes a long term viewpoint, but that is just my opinion.
From your own post:
"But we’re going to – our plan is to file a 10b5-1 stick it out there with a tranche at a – what I believe to be a below market multiple."
If by "market multiple" he means the S&P500, then the forward P/E is already well below that, since that is now around 15.72. Since this is a small cap stock, an argument could be made that he means the Russel 2000, in which case it would be around 19.4 (as of 7/25).
Do I think he means this? No. But that would be the literal interpretation. In the past he has said that they would consider buying back stock only at historically low valuations and now he is saying low compared to the market valuation.
As far as what forward P/E's he "passed" on (the 8 and 9 figures you cited), you are making the mistake of assuming that he knew how much demand was going to surge. He couldn't have, because it was unprecedented. For example, when I said the forward P/E was 7.2 when he bought back previously, that is assuming that he knew that next year's earnings would grow +71.3%. There is no way he knew that. His estimate of the Forward P/E was probably more like 10 to 11 when he bought back.
Having said all that, I believe he is doing shareholders a disservice to accept that low of a P/E compared to the overall market, the industry, and the sector that RGR is in, especially with RGR's highly respectable normalized earnings growth curve.
Well what we know is that last time he bought back in Q1 2011, it was before a +71.3% growth in earnings for the next year vs previous. Also, the Forward P/E was 7.17 based upon psychic knowledge of the future and 8.98 based upon analysts estimates (assuming they were not revised upwards which is doubtful in which case it was higher). The ttm P/E was 10.06 at the time. All of these figures are extremely low. What we don't know is what his estimate of the forward earnings was at the time, nor what his estimate of forward earnings is now.
Right now the ttm P/E is 9.2 and the forward P/E based upon analyst estimates is 11.5. If Mr. Fifer is waiting for another 7ish Forward P/E and if the analyst's estimates are correct, he may not buyback shares in the near future unless the share price gets down to around $32. I find this highly unlikely that he would wait for that price and advertising that he intended to do so could be considered as tantamount to causing that to happen. He has not exactly done that, in so many words. I certainly hope he has a higher forward P/E in mind than that, especially for the first traunch.
correction: never went below 10.0 (not 10.4). Again, that's based upon closing prices before earnings releases. I realize your two spot points are lower at 9.4 and 8.1. Again they would have to have been psychic and the value of forward P/E when they actually bought back was 7.2 based upon actual (9.0 based upon analyst ests.)
I'm not forgetting anything. Oh, so they knew that the surge was going to take place, lol? And if they did, why would they need to buyback the stock before a big surge, especially when by their very nature surges have a finite lifetime after which normalization occurs?
At the end of 2011: Forward P/E = 9.35 (if they were psychic), ttm P/E = 16.0
At the end of 2012: Forward P/E = 8.10 (if they were psychic), ttm P/E = 12.7
If you look at the ttm P/E's after the Q1 2011 buyback, they never reached that low level again...........until now, based upon closing prices just before earnings releases (I haven't checked it for every day's closing price). Just making the point that he probably uses ttm P/E, not forward P/E. Forward multiples based upon actual future earnings have averaged about 11.4 over the past 5 years and never went below 10.4 (since the buyback), based upon ttm earnings they have averaged around 13.6 and never went below 10.8. I would assume that the company has a better estimate of their future earnings than the analysts, even though they don't do forward guidance but I'd like to know why you believe that "they could have easily foreseen" what their forward year's earnings would be, especially "amid the surge of earnings".
PS: If the company had somehow been prescient, and knew what their Q1 thru Q4 EPS's were going to be, these buybacks would've represented a forward P/E of 7.17, but I'm sure they had know way of knowing that their FY 2011 vs FY 2010 EPS growth would come in at a whopping +71.3%. In other words the 7.17 figure is not relevant to determining when they will buyback in the near future and the ttm P/E is the more relevant.
So you know that they don't do forward guidance but you are using a forward P/E based upon your own estimates to determine when they will buyback. Historically the ttm P/E at which the company last did a buyback (Q1 2011) was around 10.06 and this stock closed at a ttm P/E of 9.2 today. I'm not saying it won't go lower, but probably not for very long. The lowest the ttm P/E has ever gone was 6.35 on 12/31/2009.
Annualized over the last 2 years, this quarterly EPS growth and Rev Growth are +18.75% and +15.02%. Not exactly out of the realm of what could be considered a growth stock. Certainly not low enough to warrant a 9.2 ttm P/E. It wouldn't be fair to compare to Q2 2013., which were the highest EPS and 2nd highest Rev figures ever posted by RGR, due to the surge.
Yeah I noticed that too. Actually the low point of guidance is 18.68 and the midpoint is $18.94B. Still beats $18.90B by $40M. Why don't they force these boneheads (or crooks) to make a retraction? This stuff goes on all the time.
There are only 5 of 45 Electric Utilities performing worse than AEP today so it looks like someone is attacking the stock today for some reasons of their own. The SEC needs to bring back the uptick rule.
PS: Valuation is good at ttm P/E of 15.6, which is better than 34 of 45 Electric Utilities. PEG is better than 26 of 45 utilities.
I'm baffled as well. I guess this is another case of Wall Street running the stops and taking people's money. Doesn't make sense for utilities to be selling off on a day when interest rates on treasuries are down significantly but I've been seeing this irrational pattern lately. If it goes against rational thinking, buy the dip I guess. If you look at fuel input costs today, Heating Oil is up about 1% but Nat. Gas is down 1.9%. I wonder what would've happened if they hadn't beaten on EPS by +6.7%, +9.6% y/y and beaten on Revs by +2.0%, +11.7% y/y. They also reaffirmed their forward FY '14 EPS guidance of 3.35 to 3.55 vs 3.48 est, which is +6.8% y/y at midpoint.
Zacks still has this as a BUY after the earnings report. They say shale oil industry is booming in their area and will continue to fuel AEP growth.
9-10% Rev guidance vs +8.3% analyst consensus doesn't seem like a disaster, especially since they are probably sandbagging it a bit.