Cerberus is not just the Devils gatekeeper in Greek mythology. They have a horrible rep here on Earth as well. It would be a huge mistake for S&W to get involved with them. If they do I'm gone. They will find skeletons with every door they open. S&W management PLEASE HEED THIS ADVICE....
A growing problem for SLW was that their business model was starting to look too easy, making good deals harder to find and competition in their field. This recent weakness in precious metal prices and ABX's recent political snag will give them some awesome opportunities as mining operators need CASH up front partners to finance projects. The banks will be more cautious. Lets face it, if you don't think gold and silver are going higher over the next 3-5 years, you have no business owning SLW. If you do, SLW is one of the best ways to protect against declining fiat currency values and participate in rising metal prices .
I know several things to be fact. Debtor nations around the world are printing fiat currency like mad to solve their problem. Paper money will continue to decline in value. Positive balance of trade nations are dramatically increasing their holdings of gold as a percentage of their reserves. Physical demand continues to be very strong. The silver/gold historical ratio favorable for silver. Industrial demand for silver is strong. SLW is an excellent way to get exposure while collecting a div while you wait. Seasoned management team to take advantage of opportunities. In the short run, I have NO idea where the metals might go. Hedge fund and margin liquidations, "chart patterns", seasonal issues and other things may trump what I have stated if you are a trader. IMO this is a stock to take a position in around these levels to hold for at least several years if not longer. I'm betting both the pice and payout will grow over time.
As I stated in a previous post, I'm not a trader. I do consider the recent metals weakness to be positive for SLW 's longer term business plan. I do consider myself a disciple of the contrarian theory however. It appears to me that we are at the most bearish consensus on the metals we have been for years. This may be valuable to those of you who are traders . I must add the caveat to NEVER USE LEVERAGE.... My 40+ years of investment experience has taught me this through my own experience with it. You can be right 9 x in a row and wrong the 10th time and wipe out all previous gains. Needless to say, few are right 9 x in a row to begin with. Younger investors think they have lots of time so they can afford the extra risk. I say, it does no good to keep starting over.
Canada no longer withholds 15% from US shareholders on Canadian stocks if you own them in your IRA...another thought, if you own SLW as a hedge against a falling dollar, being Canadian, there is an extra benefit since Canada's debt situation is allot better than us. They also have a fairly stable medical system when compared to the major upheaval Obamacares implementation is doing to our economy.
He has his hands full with his 3 scandals. There's no time for pushing gun control. He's fighting for his life.
If I were considering a leverage buyout, I would look for a cash cow in an industry out of favor with no debt and back orders up the wazoo. Sound familiar? Over a period of time I would have accumulated stock on weakness then sold the stock into weakness in enough quantity to break down the stock below technical support levels to get weak handed traders to do my work for me. After breaking the moral of even ardent investors, a takeover bid by a management led group or a hedge fund will be more warmly rec'd. I'm of the opinion that neither RGR nor SWHC will be public companies before the end of Obamas administration. Gun companies can no longer be public. They need to be held privately by organizations totally immune to harassment and brow beating by the likes of the anti gun liberals like Bloomberg, Feinstein and others. The stocks should be taken out at prices at least 30% or more to today's levels. I actually like SWHC more right now, but RGR with no debt has to be getting some hard looks right now.
This is a less costly way to do an underwriting. You have less "Compliance Issues" than if you are selling to "the public"... Institutional investors are thought to have enough "savy" not to need the extra underwriting rules provided as a safeguard to "the man on the street"...
Since this is a very small amount of money, there is no need to have a public offering. Brokerage firms charge more fees and commissions to do such an offering. This deal will get sucked up by a handful of institution vs 1000s of individuals. Less legalize as well.
Both a cash cows but have political baggage. Would do better operating as private companies. Someone will realize this before long and I predict both of these companies will be private before Obama is a private citizen. The should both command a nice premium to current prices.
RGR and SWHC are known for making guns....what they really make is CASH...not accounting gimmicked up earnings... They make CASH....and that's what LBO artists look for. These companies can pay for the debt service and still return tons of cash to the owners. Gun owners BUY guns... The more guns are sold, the bigger the market for additional gun sales become. People who know nothing about guns think a person buys one gun and IT lives on after they die. Truth is, once you buy a gun, you'll buy more of them. Different calibers... For different purposes. They tend to get more sophisticated and expensive as time goes by....and yes there is a little "lust" of owning a finely made gun, just as some lust over exotic sports cars, watches, bicycles and other precisely made machines. Now many are looking at them as a "store of wealth". A collectible. We have not even begun to hit a peak in gun sales yet. We might be in the the 3rd inning. Both RGR and SWHC will be taken private and the parties doing so will make a mint doing it. I just hope we get paid a fair price when they do it.
Heh gentlemen....check out how many pairs of shoes your lady has. Those believing gun sales are about to fall off a cliff may not have checked out a typical ladies walk in closet lately. ""Let's see, since I have one in pink, maybe I should get one in lavender." The gals are accessorizing their M4s in different colors among other things. Doesn't hurt gun sales to have an NSA acting out Orwell's novel and politicians so far left they make Karl Marx look like the father of capitalism. For all the nay sayers counting on the gun control lobby to bail out their short position in RGR and SWHC I have some bad news for you: THE PRO 2nd AMENDMENT MOVEMENT IS TWICE AS MOTIVATED AND 4x BETTER ORGANIZED THAN THE ANTI GUN RIGHTS MOVEMENT...and the 2nd amendment had nothing to do with our right to hunt ducks.
The firm also issued a recall of certain Thompson/Center rifles on Thursday, saying the safety lever on some of the rifles may be compromised, which means the safety lock might not work. The earnings take into account expenses related to the recall.
Stocks always climb a wall of worry. Message to short sellers: BRING IT ON!!! MAKE MY DAY.....you may not know it but you are looking down the barrel of Harry's Model 29....