Reminds me of the Sears and Kmart combination days. #$%$ buying #$%$ leading to synergistic....#$%$.....with a lot of real estate in the portfolio.
I agree that $10 is the new floor by the way. Talk of selling lower than that with 75 million on the table is rather amusing.
I hope you're right but the trading of RGR down and SWHC steady the last several weeks says to me that some folks 'knew' of the $10 offer and were propping up the stock with their buying.
I forgot to mention, this year has seen the third highest M and A activity ever......there's cash out there looking for a place to go and again, SWHC is prime real estate once the political stigma subsides (we're very, very close- look at the lack of pounding on gun companies for the Santa Monica nightmare)
The $10 deal is unique and interesting but let's get back to the cold hard facts again...
1. Earnings are 1.22 for the year. That means at a stock price of 9.80 (rough premarket price), the prior year PE is now 8.0 in a company that is experiencing a growth rate of well over 30%.
2. The companies removal of approximately 15% of the float means that future earnings are going to be up roughly 18% automatically. That's an 'automatic' growth rate of 18%.....on top of the actual growth rate. This will further drive the PE down.
3. This is a cash cow that is a prime takeout candidate as the fears over the 'evils' of guns subsides and people slowly realize it's better to protect oneself than be in a situation such as the UK where an unarmed police officer dies while waiting for an armed one to appear (and the citizenry stands by helplessly watching).
4. See number one again. Look at that PE ratio. Look at the earnings this company is raking in. Situations such as this cannot and do not last very long.
SWHC remains a core no brainer holding.
I think there was a slow leak occurring so they had to prerelease the information to get it out to one and all. Pretty straightforward explanation and it fits with the stocks trading pattern.
Well said. Only thing I'll add is that in general it takes investors a little while to realize that hey....Cabelas had blowout numbers......it was mostly due to gun sales......maybe I should invest in the gun manufacturers since Cabelas has already run 15%....so the rise tends to take place a little later in the day as shorts cover/longs enter.
Fyi for the board, I was at a gun swap in Kalamazoo, Michigan last weekend and the line was out the door snaking around the building. Incredible. The Senate may have voted down further gun regulation but the demand is still running hot at least around these parts.
Sentiment: Strong Buy
Look at the price action the last three trading days...then cover (just popped the 8.60 cherry).
And if the charts don't convince you to do the obvious move, then explain to me the downside of SWHC buying a name like Remington along with the associated equipment/personnel with their offering. I'm just not seeing considering the simply ludicrous demand for guns.