Comparing # of deaths to the chosen tool is a fools argument. Firearms are regulated but HED's are not. Chemistry is offered at every college. Silly wabbit. There are things out there everyone has access to that make common firearms look like garden tools. You take away a killers tool, he will improvise. Human beings have been doing this since they discovered fire. Most killers are too ignorant to be as dangerous as they could be. The lousy thing about bombs are they can be detonated remotely far from the killer. With the Mexican boarder going unchecked and terrorist groups and affiliates popping up every day knives, machetes, axes, and firearms are the least of our worries. Arm yourself to protect yourself and your family from the ignorant killers and hope they don't get smarter.
It's not the tool that took life it's the sick sob who used it. I try to be vague to encourage people to think for themselves to promote rationality. It's all about the killers intelligence that will dictate the # of deaths.
And again...you can purchase of few items from the various shopping outlets to level a 5000 sq ft home at the push of a button. If you make them think harder they will.
You got about a month to find a buy in. If RGR has decent earnings it's going to be tough to find a buy in this low. Ammo availability this year is going to have a different affect over last year when you couldn't find any ammo...gun sales have potential to increase. Nobody wants to buy a stapler if they can't get the staples for it.
So hypothetically, which brand of diaper would you prefer to be wearing if Smith was granted a military contract? You do know that's in play right now. I'm assuming you realize ammunition is on the shelves at retailers this year which wasn't the case last year. Who goes to the store to buy a stapler when staples are on national back order? You also realize Smith has to beat .07/sh during the next conference call. Do you really believe that there is the slightest challenge in doing that? I'm expecting some serious whip lash by or just after the next conference call. You should strongly consider an exit before the CAB and RGR conference calls. I think you'll find ammo availability is a key component to firearm sales. On another note, take a look at the NICS since inception. Gun ownership continues to sky rocket. If you're short, you are the one trying to catch a falling knife. Take the gift you've been given while you can.
I'm not hoping for it. After all this is a gun stock. Revenues could double over and the market will still trade it like a plague. I own this stock because it's fundamentally sound and is as close to free/cheap/undervalued as you will ever find. However, on a more comical note, watching the shorts scramble after the announcement of a contract award would make me laugh a lot more than I usually do. Who else would get the contract? This is the question you must ask yourself, then go to a range and rent some of those potential winners and make a logical comparison. On the note of accuracy and reliability, Smith won't be easy to beat. "Catching a bid" isn't necessary if the competition is poor. If the military switched to polymer framing, Glock is the only competition Smith has IMO. What products hit the market that might inspire the military to consider a switch? Glocks been around for quite a while...oh yeah...M&P. Who makes M&P again? Debney's statement about not fighting for a military contract didn't mean they wouldn't bid for it. I believe it meant "If you want M&P, it's going to cost you". Keeping margins healthy isn't something Debney is willing to throw away.
Doy ya think? The stock went from $17 to $9. Of course they are dissatisfied. It doesn't matter they closed out a record sales year with great margin. The stock dropped 45% so now everyone is trying to blame someone and point out every little flaw. I believe they should terminate the options awards and replace them with cash awards based on performance with an insider purchase % of pay qualifier. In other words, if they don't use a certain percentage of their salary to purchase company stock at market value, they don't qualify for a bonus. If a stock drops 45%, the first guy anyone points the finger at is the CEO despite what was accomplished prior to the drop. I was a little disgusted that Debney received options not too long ago after incurring debt to reduce shares outstanding. That doesn't sit well with me...it just seems unethical. The company is still solid and if we didn't have options awards and debt for buy backs to complain about, we'd fine something else right?
Only a few years after the Beretta 92 was introduced, the military took bids and held a competition between the likely candidates. In my opinion, the competition was simply a formality. I'd be willing to bet the military got there hands on a few out of the first batch and pre-tested them. Is it coincidence that approximately 3 years after the 92fs hit the market the military made a decision to elect a new side arm? I think not. You know and I know the military has already tested the M&P line along with every other line out there. Something has inspired the switch. The bid was irrelevant with Beretta. A better product hit the market, it outperformed all others, they got what they came for. Is the bid irrelevant now? There is a nice little PDF available on Beretta's website outlining the M9 history. Check it out. It's almost like the 92fs was only made/modified for the military before the competition was conducted. The military found a better product and they got what they wanted. They tested every available firearm well before the formal competition. It's a guarantee they have found something that outperforms what they have now. The bid is simply a tool to get the best price and to appear that they will consider all models for the replacement. As I said before, every model out there has been tested over and over again. Ya know that massive ammo shortage last year, maybe they had to burn through that many rounds before they could get the M&P to malfunction. Nah...that's a reach lol. But the government did buy a pile of ammo for range practice (so they claim). Range practice, range testing...meh same thing right? The choice has already been made folks. It's just a matter of contract details and announcing it to the public. All other bids are simply the appearance of equal opportunity. Something has hit the market over the past few years that the military wants. History repeats itself yet again.
What's so secretive about military officials going to a target range? Concealing the testing wouldn't be terribly hard. A 4" barrel would be the minimum for the pick. Remember the sidearm is their back up weapon and needs to be accurate beyond 10 ft. A pro series 40 cal would be my guess. Being able to change the grips is a benefit for men and women. If there is an issue of muzzle flip for the user, there is the ported barrel/slide model. The bid is to put pressure on the vendor to get a low price. There are plenty of models available for far less than a M&P. Why wouldn't they win the bid? Because the military doesn't want them. They already know what they want and they will try to use the bidding process to get better pricing through competition when there simply is no competition. I think Debney knows this and he hinted at it with his previous statement pertaining to non government customers being their bread and butter. Smith and Wesson and many others from the competition that Berretta won widely contested the outcome of the competition. And after further review Berretta still won the contract because the military was already fixed on Berretta. The exact same thing is happening now. If history is a guide, the last model line to hit the market with the characteristics viewed as favorable by the military, is the model they have chosen as the replacement. The 9mm may continue to be the favored caliber, but I'm willing to bet something out there is outperforming the M9.
They are low profit if you agree to low pricing. When the buyer really wants something from the seller, the seller always has the upper hand if he's smart enough to recognize it. I'd expect a contract to carry a discount. If Beretta can profit off the metal alloy M9, there are even more profits to be made selling the polymer frame. The advertising of the switch by news networks, word of mouth from military personnel to civilians, and foreign consumer exposure would easily make up for some margin loss...it's all free advertising. Can you imagine all the news networks advertising a branch of the military switched from a 30+ year old time tested sidearm to one of the M&P's? The shelves will be bare again in a month or less. There will also be a different tune to market recognition resulting from more attention from institutions. Valuation metrics may change drastically over night. This could bode well for Ruger's metrics as well. No more single digit PE's even in slow growth periods. The M&P (military and police) implies Smith created this line for a specific audience. Just like Beretta created the 92 for a specific audience. It wasn't by chance, it was by demand or perhaps by design. When Beretta won the contract it was announced during the month of November. If this comes to fruition, I believe Debney will use the rest of the revolver credit facility and some of the cash on hand before it happens. If the contract happens, $9/sh is as close to free as it's going to get.
Agreed there will be some adaptation hurdles to overcome with an increase in caliber. I'm 180 lbs medium framed. If I can adapt from 2 hands to 1 with a 357 magnum with consistent practice, moving to the 40 isn't much of a hurdle. A fraction of a second matters in combat situations and even if the 40 slows an extremist down by only a fraction greater than the 9mm, it might mean the difference in a life or a casualty. We can speculate on many things, but there is going to be a switch.
You're just a negative Nancy. You're input is appreciated though. Many folks have the 700's. It's advertising. If the contract comes, Debney will push the remaining buy back just before the late phase finalization of the contract. The current PE is so low, you'd think the company is going bankrupt. It's sickening. During the Obama boom a 20 PE would have been normal for any other politically correct stock on the market. Smith struggled to keep 13. This is insanity in my opinion. The market penalizes RGR and SWHC by almost 50% of potential. Some positive PR might go a long way and it's in Smiths best interest to remove shares from the market while they are this cheap. The NICS show a flat line to 2012 which wasn't a bad year at all.
I'm not asking for anything. The stock price can keep dropping for all I care in the short term. Fact: The Army is replacing the M9. There's no point in fighting this. It's going to happen. Fact: The last time the military switched platforms, they chose the latest product line to hit the market. Fact: SWHC inventories are rising with full knowledge distribution channels are full. Fact: M&P was originally designed for Military and Police. I strongly believe the decision will be announced before year end. Business relationships come and go. Smith had the advantage to learn from all other polymer designs by being the last to the Tupperware Party (read an article the other day with that title...clever). It makes it easier to keep all the advantages and lose all the flaws when you get to dissect the competition.
"3 Cabela's Catalysts to Consider" by Jason Raznick written on Oct 2 suggests Cabela's stock is likely to climb. The author didn't make mention of RGR or SWHC, but he did point out a large part of CAB's sales is from firearm sales. The article states there has been an increase in internet search engine hits for Cabela's. Between increased search engine hits, increased short interest, and NICS the writer along with analysts seem to be looking for an uptrend for CAB. It's amazing how hard it is to sell a printer without ink/toner available. Ammunition availability will drive firearm sales again this hunting season.
I have a PX4 9mm. I'm here to tell you it's a nice piece, but it's also a sand trap. There are more nooks and cranny's on it than most. If you're reaching for a new replacement in anything besides an M&P, talk about Glock. I've never seen a law enforcement officer with a PX4 on their hip and that's an easy spot. Beretta doesn't have a model that doesn't collect trash. This is the biggest reason striker fired has the advantage in desert applications.
Colt may be in play, however only the name has meaning to me. It's not the name of the latest and greatest on the market. It's not the name of dependability or accuracy. It's simply a name of tradition and history. The assets within the plant are the only real value being up for grabs. The product line isn't anything to get excited about. Are the assets updated and or well maintained? Is there anything of interest besides more square footage and a name in history? Paying for the name "Colt" now will not get the respect or recognition of 40 years ago. Expansionary measures wouldn't be a bad idea, however buying a pile of debt along with a mediocre and unpopular product line for the sake of expansion makes little to no sense. Ammunition manufacturing would be far less risky and a much better use of cash on hand.
Simple solution gentlemen. Keep it chambered. Law enforcement officials do not rack a round when they pull their firearm because it's already chambered and ready to fire. Even striker fired Glocks and M&Ps.
It's nice to see someone else is paying close attention to inventory. Milking the books to pay more in taxes makes no sense. Why not just carry the asset as cash and not buy the unfinished goods? Management is far from incompetent. They may be selfish, but hardly incompetent unless you're referring to Golden...which might spark some argument. The inventory increase is just part of the grand scheme and it's one of the few parts of the scheme that we (joe shareholder) can see. Check out the September presentation on Smith's website. Military and law enforcement expansion is on the roster for 2015. They conveniently placed it at the very end of 2015 making it look closer to 2016. The plastics acquisition was a big tell as well. Award of a major government contract would have resulted in Tri Town bidding higher instead of lower for Smith's business. It only made sense to take control of the polymer plant there by taking control of the lower half of the M&P line. Tri Town didn't really understand what the long term value of that lower half could become. The deals done and everyone's happy. Refer to history of the 92 and compare the timing it came to market and when the military showed interest in it. Within 3 years Beretta won the bid/competition. The M&P line was the last line of polymers to hit the market and with in a short period of time, the military has decided to make a switch. It appears the exact same scenario is playing out for Smith and Wesson as it did for Beretta. The M&P line hits the market, the military expresses interest behind closed doors, Smith takes a couple years to get their ducks in a row (plastics acquisition and inventory supply), and the November acceptance announcement may or may not be looming. There are multiple phases to this type of contract, Smith will know well before it's announced because the military will likely request minor modifications to the goods and to the contract. I'd be watching for another repurchase.
Take a look at CTD. Out of stock on S&W 44 mag revolvers and down to 2 S&W models in 357 mag. This tells me 2 things. Either demand for hard hitting revolvers is through the roof and Smith can not keep up with demand or Smith has bigger fish to fry. With inventory levels increasing, we now know the magnum revolver line isn't part of the increase even though, traditionally, they are what S&W is known for. Remember, these revolvers are much more expensive inventory items compared to the polymers. If the revolvers aren't inflating inventory levels, it has to be the polymers. Why would Smith continue to pump their stock full of all these polymers? Keep an eye on the 1911 availability. Once distributor stock is depleted, restocking orders just might get delayed.
You're absolutely right. Nothing to see...no high end metal framed firearms to buy either, especially with a sales forecast to reflect early 2012 levels with cost of sales falling in the polymers. So by your analysis and Debneys forecast, current turnover is 65 days. That's a 50% increase in TURNOVER if you compare today's inventory to 2012 sales, not factoring in the lower costs or the lack of high end handguns. Analyze that!