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Sturm, Ruger & Co. Inc. Message Board

je.starling 4 posts  |  Last Activity: Jul 30, 2014 10:00 AM Member since: Mar 4, 2013
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  • Reply to

    Buyback = about 10 percent of outstanding shares

    by coachd40 Jul 30, 2014 2:16 AM
    je.starling je.starling Jul 30, 2014 10:00 AM Flag

    Because they knew this was coming, that's why they did not pull the trigger.

  • je.starling by je.starling Jul 30, 2014 9:57 AM Flag

    I've been out of RGR for a while, but I bought this dip at 52.2 price per share. I am intrigued by the $100 million buyback. I think that will support the stock price and add 10% to EPS, which is big. I think the market is overreacting. Hillary is going to be elected in 2016 and the Dems are coming for your guns. Get in low and ride the next gun panic.

  • As of 10:45 a.m., it looks like RAD is forming a hammer candlestick. Buyers are stepping in at the 78.6% and 76.4% Fibonnaci retracement of the last rally. Let's see if it holds.

  • RGR is going to take a hit from SWHC's forward guidance. There's nothing you can do about it. Fifer knew this was coming as demand "normalized" (and by normalize, we mean 7% CAGR demand growth per year which every other industry would kill for but, because guns are politicized, RGR and SWHC don't get credit for). SWHC is confirming for Wall Street that the "slowdown" (again, the normalization to 7% CAGR that everyone would kill for) is here and coming. Wall Street, as usual, will overreact and swing SWHC and RGR down hard.

    Here are the levels you need to watch:

    ~60.71 pps - 61.8% Fibonacci retracement of the rally from June 12, 2013 to January 17, 2014.
    ~58.50 pps - 38.2% Fibonacci retracement of the rally from February 2011 up to January 17, 2014.
    ~56-57 pps - Bottom ascending trendline from Oct. 2011, touching on June 7, 2012, touching on December 18, 2012, touching on June 12 and 13, 2013.
    ~55.02 and ~54.18 pps - 78.6% and 76.4% Fibonacci retracement of the rally from June 12, 2013 to January 17, 2014.
    ~52 pps - Bottom ascending trendline from February and June 2011.

    I am going to look at 52-55 for a buy point, depending on how the RSI, CCI, and other indicators look. Right now, the daily and weekly chart have a low enough CCI that momentum could get pushed for some sharp momentum declines.

    Some long-term thoughts to keep in mind. First, RGR's Shiller PE (look that up if you don't know what it is, because it's far more important than PE) is ~ 22.2. That right about where RGR's Shiller PE was during the stock market declines of '08 and early '09. So, from a value basis, RGR is going to be way undervalued when it gets hacked over SWHC's guidance. Second, keep in mind RGR Fifer has $25 million in dry powder to stock buyback when Wall Street comes after the stock. Last, keep in mind RGR still has a backlog, is running at full production, and will continue to perform strongly on earnings and revenue.

51.19-0.05(-0.10%)Sep 15 4:03 PMEDT

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