@ret3fe - You should be ok. They will report a very strong quarter coming up. It is baked in with a huge inventory deficit at the distributors and with strong nics that are ABOVE last year (not exactly what the "analysts" are saying).
The next quarter I believe will also be strong as they continue to take market share, ship new products, grow accessory business, strength of pistols (their specialty) AND continue to replenish inventory. ALL factors that are mostly INDEPENDENT of nics. They will also be in their high seasonality.
After that - it gets grey, but the overall trend for years is upward as social disturbances, libs, and Islamic terrorism is in the news everyday.
If anyone did not know Wall St is crooked, look at today.
- Head lines like "biggest drop in background checks in a decade". Or, "Gun sales slow".
YET, background checks were UP 9.2% over the same month last year!!
- How about "margins slipping because of outsourcing". Meanwhile margins have done nothing but improve on greater volumes. YES they are outsourcing because they cannot keep up with demand.
- THREE analysts come out on the same day! What a coincidense! Also on first day of trading on a new quarter.....!!
I remain bullish on the FACT NICS are up EVERY month this year over last AND S&W is literally selling evrything they make.
WHY NOW?? They shook the trees and created a "sweet" opportunity to leverage long via options on S&W. Watch this activity this next week and you will see. SOON will be the military announcement and the NY & DC insider crew will cash in.
The shorts are having their last hurrah. This qtr will be great as nics are strong, and distributor inventories are WAY below optimum level.
@gyrcolucky - Have you herd what the March nics were? If so, what will happen to the shorts?
" P/E is high" Is it really? It depends on your calc of P/E. The last qtr was .59 and the inventory at distributors went DOWN! This qtr NICS still high plus trying to bring inventories up...so .60. Then we hit the seasonality and last year was over .60, but I will go to .65 (increased production). Then I go with .60 again.
THAT = $2.45 during a 12 month period or a P/E of 11.....NOT high for a company taking market share and not being able to keep up with demand.
Now add in the potential for military business and stock buybacks.......I think we hit $40 by years end.
@dummy parent - So what do your comments have to do with SWHC? Seems to me you're a classic lib hypocrit and SELF appointed board censor. YOU have never added anything but arrogant comments and recieved thumbs down. Congrats!
You ARE becoming the board clown..........dawnkeyenay?
Dummy parent - just ONE MORE left wing, arrogant, idiot deciding what should be said. Why are "liberals" so afraid of others expressing their thoughts?? Soon "Dummy" will be asking for "some muscle".
Ironically I believe "Dummy" is also - dawnkeydenay........
@jrhauri - We shall see on the numbers. (side note - my first 2 initials are jr also? Also retired. Also live near Minny)
Congrats on your initial purchase @ $5.40. My first was a little over $8. So I have endured 2 large swings (from 17 bck to 9) and (26 back to 19).
I truly believe that SWHC has changed in the last 6 months.
- They have more diversified base (accessories)
- They have higher margins. Capital spent on equipment and volume.
- The national BASE of gun sales have gone up. Not just a temporary spike.
- Near term (the next 6 months ) is VERY predictable based on Debney's comments on inventories, seasonality, and NICS.
- They continue to take market share ( would be MORE if they had production)
Also I like the "wildcard" military option. Pistols alone would be about a 50% to 60% increase in business PLUS exposure. Unless the world changes I am holding (never been good on timing) until after the next announcement.....
New high is a reality....$28.25.
As to P/E, I come up with a different number.
- Lets start with the qtr just announced (historically worst qtr of year)....$.59 = qtr 1
- They just LOST ground on inventory (plant & dist.) & NICS up in Feb.........$.60 = qtr 2
- Heading into season with still a high inventory deficit (more production w GD).......$.65 = qtr 3
- Not so predictable as the others (still seasonal) (still election year).............$.60 = qtr 4
SO ......for the 4 qtr's I selected I see about $2.40 to $2.50. P/E of conservative 18 = $45 stock price.
NOW add in the military business..........?
Hillary LIES?? The surprise would be if that corrupt liar EVER told the truth.
400 million - Clintons laughing all the way to the bank....kickback city!
- Maybe because he will run and doesn't want to be so vocal anymore?
- Maybe he is starting to realize news (good or bad) sells guns?
- Or as you say, with a $59 cent qtr (historically lowest qtr) the stock is cheap.
If they average this going forward, the forward P/E is about 11........or very LOW. With the military business this stock is a very easy DOUBLE with little downside risk.
MY projection for the next 4 quarters is about $2.30/share....without the military. The next two or three quarters are already baked in with reduced channel inventory and current level of NICS. Even if qtr 4 drops down, production will STILL be high and manufacturing levels will provide great margins as they also need to increase their internal inventories.
A 20 P/E = $46 share price. R E L A X and I think they will get the military deal.....
Also do not forget that their EBITDA was very HIGH......they can easily make a meaningful aquisition that would be accretive day one. (100 million current cash!)
- What isn't mentioned in most analyst reports is that the quarter that just ended is historically S&W's WEAKEST quarter....... All other things being equal (assumption), the next 3 quarters woill be better.
- Note that Debney stated that inventories actually went DOWN during this high volume qtr. Distributor inventories were below desired level at the beginng of this quarter. Therefore shipments are PURE SALES, not channel stuffing and there is a bigger distributor gap to be made up.
- With reduced inventory to make up, and a very strong Feb. NICS, this quarter ending in April is assured to be great also.
- Now add in the military potential.
- Continued HIGH growth and margin on accessories firms the base.
- The first two quarters ofthis fiscal year were weaker. Therfore the next three quarters will have great comps.
WHy would you sell now?
Now is not the time to sell or even trade for a few pennies. This qtr the announcement WILL be very strong. They raised guidance by a very large amount. That would not be done to cut it close or miss.
Also based on NICS and ongoing publicity, the next qtr WILL also be very strong.
So I say $28 within a week of earnings and $30 within a week on next qtr's earnings.
ADD $2 to $3 if they get a formal announcement that they are a finalist for the military business.
Because we are in an election year and the 2nd amendment is high focus, I expect pistol & revolver sales to remain strong for all of 2016.
With the continued strong growth of accessory division (with high margins), stock buybacks, cash generation, military business, acquisitions, etc., by the end of 2016 there will probably be a very strong story going into 2017. R E L A X
They RASED their guidance to .39 to .41 for the QTR ending Jan. 31. So lets say they get $.42 (a small beat).
This is historically their WORST qtr of the year. They could be pushing $2.00/ share profits/ year going forward without the military business.
This and the next quarter are already known and they will be very strong.
@parent - as a complete a-s, the only buttons being pressed are those that consistently give YOU a thumbs down. Congrats! Your the board clown.