The term warranty is often misinterpreted as "guarantee". A warranty ensures the buyer of a product, that the product is free of defects usually relating to workmanship and material. Worn parts are normally excluded from warranty policies with the exceptional argument of a "prematurely" worn part. You can't blame the 100k mile warranty for Chryslers problems, it was simply a composition of sub par materials and workmanship (design). Their drive trains were junk...point blank. The M&P warranty will stand as a benefit for the company and the consumer if the M&P line is of truly superior value. This gives the buyer piece of mind and allows the buyer to justify a paying a little more for a "life time warranty". There is something most manufacturers provide called a "policy adjustment". Even though they may have every right to deny warranty as per their terms, in some cases, small incentives may be policy adjusted to keep the customer happy ie a $10 firing pin or $13 guide spring. I have extensive experience with tire warranties and heavy duty equipment warranties. In most cases, the manufacturer is always on the winning end.
Overall market news is suggesting broad based sell of is a result of over valuation. I do not agree. Most of the over valued stocks are not tipping the scale enough to lead me to believe this. With stagnant and some what undesired news/events in the over all economy, I would be more inclined to preclude that the big boys are making sales hoping to get the retail guys to follow for a better buy in price. The VIX previously stated in another thread, shows that retailers are not falling for it or at least not as much as the big players were hoping for. If there is going to be inflation from the Fed's easy money policies, stocks will have the biggest profit potential. This is a last chance effort being taken to get in at a better price. It was done in January, but nobody knew this winter was going to be as long and nasty as it was. Financials suffered too, so why not use a weak earnings season as leverage and an excuse for a sell off. If projects were delayed because of our nasty winter, those projects still have to get done right. Business will resume, just a little late this year.
I didn't write it. I wouldn't have said there would be 59 m shares outstanding after this next round of buybacks. It's actually going to be 49 m. Other than that, the article was well written and the web search add in was news to me. Most everything else was common sense knowledge that anyone with a calculator and the internet could have figured out.
This is hardly the top my friends. Insider sales usually mean something, but the typical "insiders must know something, so I should follow them" theory is not the case here. It is a scare tactic used to hold the price down to make the buy back more effective. Observe the March 20th transactions by Mr. Brown. One was an automatic stock sale and the other was an options exercise, but both were for 6,666 shares. Scary isn't it. He could have sold 14 more or 14 less shares, but he chose to sell 6,666 at some point. Is it possible that ATK or some other bidder has set some guidelines before a bid would be placed? ..."outstanding shares must be less than 50 million" or all insiders must liquidate a certain percentage of ownership before an offer would be made? The insider sales do mean something, but not what is usually so simple.
I agree with your Fed thoughts. The rate hikes should be the start of the new melt down you speak of. Not sure if home loans will hit 12% or higher like in the Reagan years, but if it does home equity is going to the floor and there will be another round of foreclosures, dead housing development, and new home buyers with no cash will be stuck with renting. If the rates top out like that again, I'd recommend moving the majority of cash from stocks into the heavily value depressed real estate for rentals if you have the cash to buy it outright. The rates will come back down and home values will sky rocket once again for an easy 30-80% with a decade or two of rental income to boot. But if rates got that high, cd's and savings accounts would have a decent return too if you have the cash to generate a healthy return. The stock market would suffer heavily until a new norm would be accepted by investors. High valuation stocks will fall like a rock and the low valuation stocks will become a safe haven.
She needs to stall out for about 2 weeks if we want this run to last. It's never a question of it being overbought, it's always about how long it stays overbought. This is what pushes it down so hard over a short time frame. If it doesn't stall soon she'll be maxed out in 2 weeks. The whopping short squeeze most likely isn't going to happen without a takeover bid. The shorts are so full of themselves, they'll short this up until their card board house gets taken away.
I believe revs will go up 3-7% yoy. EPS 5-15% yoy. We'll know what the current back log is in a few months. Could they pull a Ruger and crank revs up to 10-15% yoy with another facility? Sure, but to double production capacity for a 15% sales growth is #$%$. If they double production capacity, I would expect sales and earnings to double as well. I would also expect the back log to be gone in just over a year. And then what? Take a 30% Ruger slide in stock price and no back log to fall back on...silly rabbit trix are for kids. Slow and steady is the only way to go with rock bottom valuations and high short interest.
The price per share is in "funk" mode now. I'd much rather have the 2011 or earlier valuations. Blowing precious working capital on a stock repurchase program while the stock carries a PE of 10 makes more sense than buying the working capital and not having the sales to support it at some point down the road. If Smith bought back shares at $11 while carrying a PE of 10, buying back shares at $14 carrying a PE of 10 are two identically priced buy back opportunities IMO. If valuation doesn't go up, Smith gets the same bargain over and over again. If I were to guess, buy backs will continue until PE is at or above 13. Then we will see debt reduction begin, followed by a dividend. If the PPS makes it to $20, carrying a PE of 10, count on more buy backs.
More liberal serpent talk if ya ask me. Bottom line is EPS...always has been and always will be. Earnings per Share. Reduce shares and grow earnings. Any company that is focusing on doing both is fulfilling it's fiduciary duty to it's shareholders. The extent of any buy back depends on valuation. This guy can say that managing a company conservatively, responsibly, and ethically is good reason to short, but his theory will prove to be a flop. The other side of his theory suggests a company that is using funds to expand is one to buy...his theory has already been debunked, because the fence business was a flop. I've seen more company's in trouble selling their stock and the companies buying their stock back are usually much more financially sound investments.
The options awards were excessive. That's undeniable. However, when the majority of those options awards were granted, the company wasn't exactly buried in cash like they are now. I think they should amend the program by creating a purchasing match based bonus. They shouldn't be allowed to bonus more than they buy each year with their own hard earned cash. But coulda woulda shoulda doesn't change the fact that they have those options they were awarded in the past and they will eventually dispose of them. This is the time to dump them to best benefit the company in the long run.
It's pretty simple. Many have owned options for quite some time and are choosing to take some profits. It's beneficial for the company in the long run for them to sell their options during a buy back process to hold the price down which increases the value of the buy back program. There's no mystery or magic going on here. A committed long term investor understands this. Traders don't care for it very much.
The bull run on this is about to show it's horns. It could be as early as Friday, but will more likely show next week. We should begin to see the start of an upward slope based on historical chart entry points. The rate of change will drastically impact potential new highs. $15 by the end of April will be healthy and sustainable. If it stays under control, and there is another 10%+ earnings beat when they report in July, $20 is a likely new high. Smith is unbelievably easy to predict from a charting perspective.
LOL...I know. I'm very accepting of slow stock growth with Smith. However, an ATK bid at 5:00 pm for $20/sh would put the biggest smile on my face just knowing the shorts will be crushed in the am. They may end up covering some of those shares at $30...LOL so deliciously evil.
Injection molding may be a step into the tazer business? biker protective wear? boat props? atv fenders? oooh...the S&W edition truck line with S&W interior paneling/dashes? ya never know...before we know it the S&W logo might be everywhere. great ad campaign if ya ask me.
I'm leaning toward neutral. With Smith's acquisition history you'd think it would be negative, however, what they are about to acquire is hand down essential to the M&P line. This acquisition is well within their scope which would be the positive side of the announcement. So I'm calling a wash until it's final. We might see a small spike upwards when it's finalized.
Based on the press release, it looks like the additional revenue will be very marginal at the time of acquisition, however, future growth is an unknown at this time. Our margins are solid and very safe as long as Obama and the EPA don't try to shut down injection molding plants.
ROI could have been better, but for a 95000 sqft facility that Smith has total control over this may prove to be the expansionary measure Smith has always needed. Paid a whopping $23 million for it too...chump change for Smith IMO. As long as Smith keeps the people who know what they are doing with injection molding, I see this as an excellent move. Improving margins while working with the key components of the M&P platform will give them additional insight on if and how they can expand outside of the firearms industry without incurring the massive risk they acquired with a fence company. On top of that, no dilution to share holders, just a couple of months work off the balance sheet. Fair trade if ya ask me. After hours trading seems to be slow moving while digesting this news.