Smith & Wesson (SWHC): The Run is Over, What Now for the Iconic Gunmaker

[TAC]

Smith & Wesson (SWHC): The Run is Over, What Now for the Iconic Gunmaker

Smith & Wesson (SWHC): The Run is Over, What Now for the Iconic Gunmaker | Equities.com

[les.b]

Well, I have to agree that some of the exceptional growth of SWHC over the last 8 years was fueled by politics, and that that may slow some future gains on the stock. The good news is that the politics that may slow gun buying ensure that many of us can keep the ones that we already have. But I don't want to tread into the minefield of political discussion. It is prohibited for good reason!

Best Regards, Les

[da gimp]

we were truly blessed this month... but we still need to have more folks join the NRA & their state rifle & pistol organizations too... The fight is far from over brother. The anti's remain very active on the various state & local levels. Join the NRA...............We need you.

[pharmer]

Originally Posted by da gimp

Join the NRA...............We need you.

Watch and see, by next election cycle we'll be lighter by 25%. It's happened before. Joe

[da gimp]

I sure hope you are wrong sir.

[LostintheOzone]

S&W will survive, they will just move their operation to TX or some other RTW state like Ruger did. Quality will go down and prices will go up.

[les.b]

Originally Posted by LostintheOzone

S&W will survive, they will just move their operation to TX or some other RTW state like Ruger did. Quality will go down and prices will go up.

I think the point isn't that they are located in anti-gun Massachusetts, but that history's greatest gun salesman is leaving office soon, and the demand for new guns may drop off.

Best Regards, Les

[TTSH]

Originally Posted by TAC

Smith & Wesson (SWHC): The Run is Over, What Now for the Iconic Gunmaker?

From an investing viewpoint, we may see a buying opportunity again at some point as gun sales calm back down to something approaching or even dipping below normal. I do worry about the diversification that SWHC (or its new name "The American Outdoor Brands Corporation") is pursuing. While conventional wisdom says that diversification is a smart move when demand for your flagship product is expected to decrease, I'm not sure that wisdom applies all that well to the firearms industry.

[Donn]

While your conclusion, based on the recent election has merit, another panic fueled by a Columbine or Sandy Hook tragedy, is unfortunately always just over the horizon. Let's not forget the tenor of recent anti-Trump demonstrations. Don't know about you, but when anyone threatens my life, regardless how indirectly, I take it very seriously. Any of the above could be the catylist for the next panic and the run on firearms that will result. MHO, you understand.

[old bear]

All I know about the “market” is I tend to buy high and sell low

With the upcoming changes in D.C. I think the panic firearm buying is going to slow down, for me it was an entry level A.R. purchased October 2016. Not that I wanted one, but I wanted to have one before big brother decided I was not safe having one.

As for stocking up on firearms as a deterrent for the Great Unwashed, those of us who felt the need to do so already have. Now ammo will be a deferent story.

[TTSH]

Originally Posted by old bear

All I know about the “market” is I tend to buy high and sell low.

Join the club! That's been my investing story all my long, sorry life.

Originally Posted by old bear

With the upcoming changes in D.C. I think the panic firearm buying is going to slow down, for me it was an entry level A.R. purchased October 2016. Not that I wanted one, but I wanted to have one before big brother decided I was not safe having one.

Because of where I live (behind enemy lines), I tend to view such things on a very localized level. There is little question that folks are still buying around here even post-election. I was at a gun show last Saturday and buying was still incredibly brisk... not what I expected at all. But then again we still face several threats to our 2A rights in the state where I live. I did end up over-buying this past year vs. my original plan... but it was not because of the national election. It was because of bad things happening right here in my own state.

The lesson here? As the gun-grabbers continue to target individual cities & states, and even accelerate that approach after their local wins vs. big losses on the national level, there will continue to be what we term "panic buying" in localities where such threats exist or develop. As long as there is billionaire money being spent somewhere in noisy opposition to our 2A rights, there will always be localized panic buying.

[LostintheOzone]

Originally Posted by les.b

I think the point isn't that they are located in anti-gun Massachusetts, but that history's greatest gun salesman is leaving office soon, and the demand for new guns may drop off.

Best Regards, Les

Well, I think it's a business decision no matter what the reason for their recent good fortune. S&W stock is bound to drop now. It's lost 4 points sense the election. Taxes, regulatory compliance, labor and energy costs all play a part in having a profitable business. If those things become onerous, which they have in the New England states, then it's time to relocate.

Purely speculation.

Cheers

[les.b]

Yeah.... I know, its a real shame that the cradle of Liberty here in the U.S. has turned into a bastion of anti-freedom political repression. There is a certain sadness associated in the flagship icons of the firearms manufacturing world having to relocate... just think of the history in that relatively small part of America: Smith and Wesson, Colt, Winchester; and the smaller but still iconic firms: Harrington and Richardson, Stevens, Savage, and so on.... Especially with the big three, I tend to think of them in terms of their geography. But I would certainly emphasize with a decision to relocate, not just because of repressive gun control, but because of high taxes and other business realities.

Best Regards, Les

[PatriotX]

Many analysts have the stock rebounding to 29-30 in the next 6 months, and the recent dip had bumped the rating to a 'strong buy.'


The grammatical errors in the posted link don't exactly inspire confidence in the writer/analyst, either...

[TinMon]

Since I see this thread has resurfaced I will give my thoughts. Doing this w/o reading the most recent posts so I can remain unbiased by the comments of others. Then I will go back and read all.

To be transparent, I bought at $8.87/share. I have not sold any in the up or down cycles since. I bought on speculation and because I wanted to support an industry I believe in. I also have RGR, VSTO and OLN. AGAIN, no trades since they were purchased. And purchased for the same reason. This subcategory of my portfolio was my "emotional" buying strategy.  

Now on to why I am not pessimistic about this category.

My thought process:
I do not own only 1 firearm
I suspect most of you do not either
From stats, many, many people are like us
Their/our reasons vary but that does not change the facts
YES, there is always risk involved. I am diversified to reduce this issue

There will always be reasons people will start buying again if they stopped temporarily:
New leadership
New threats to our safety
New, Cool innovations
etc...

There will always be new reasons for a newbie to get into buying. This year if you follow the news, a large % of the new gun sales are going to women. New businesses are opening up to cater to this new segment of the market. Multiple LGBT gun organizations are flourishing because of violence perpetrated against their own. A new organization called Black Guns Matter has risen. The NRA is now diversifying their public face to include different races, ages, genders, etc.

Radical terrorists are knocking on our doors
Homegrown terrorist are doing the same
Crime is at my door in the sticks just like at the Mall, WalMart, the Grocery store and at many doors through out the City.

And remember, you only lose $$ if you sell lower than what you bought it for (yes other factors can be debated like how that money might have performed in another stock, etc. That is where diversity comes in).

ALSO keep in mind that SWHC does not pay dividends. Might they some day? Who knows but it is possible.

Also keep in mind new acquisitions:
--"For the year ended April 30, Smith & Wesson reported accessories division sales of $65.3 million vs. firearm unit sales of $657.6 million, according to the Wall Street Journal."

--"Smith & Wesson purchased Crimson Trace from Crimson Trace Holdings, LLC, which is owned by private equity firms Peninsula Capital Partners, LLC and VergePointe Capital, LLC; Lewis Danielson, the founder and Chairman of the Board of Crimson Trace; a small group of minority members; and certain members of management."

--What products and services does Smith & Wesson provide?
Smith & Wesson Holding Corporation (NASDAQ Global Select: SWHC) is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality firearms, related products, and training to the global military, law enforcement, and consumer markets. The company’s brands include Smith & Wesson®, M&P®, and Thompson/Center Arms™.

--YOU can do your own searches to see all under their current umbrella.

So, to sum it up I guess it depends on:
Why you bought
If you really can afford to not touch that money
And are you willing/able to continue this level of risk.

We are all different with our strategies and needs. Should I suffer some catastrophic reason to need $$ this would be one of the last things I would sell. But like "you-know-whats", we all have an opinion!