I own stock in both too, one fact the author was right about is with reduced fear of loss, gun sales tend to drop. That coupled with S&W losing the U.S. military contract has me thinking about selling.
I would like to answer your query about holding/selling at this point in time. Here are my thoughts:
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 holdings 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 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 $$ if you sell lower than what you bought it for (yes other factors can be debated like how that money might have performed in another stock, etc. That is where diversity comes in).
ALSO keep in mind that SWHC does not pay dividends. Might they some day? Who knows but it is possible.
Also keep in mind new acquisitions:
--"For the year ended April 30, Smith & Wesson reported accessories division sales of $65.3 million vs. firearm unit sales of $657.6 million, according to the Wall Street Journal."
--"Smith & Wesson purchased Crimson Trace from Crimson Trace Holdings, LLC, which is owned by private equity firms Peninsula Capital Partners, LLC and VergePointe Capital, LLC; Lewis Danielson, the founder and Chairman of the Board of Crimson Trace; a small group of minority members; and certain members of management."
--Its accessories unit, Battenfield Technologies, agreed to acquire knife maker Taylor Brands for $85 million in cash.
The acquisition will help the firearms manufacturer grow its accessories division by "expanding into adjacent and complementary markets," Smith & Wesson CEO James Debney said in a statement.
--What products and services does Smith & Wesson provide?
Smith & Wesson Holding Corporation (NASDAQ Global Select: SWHC) is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality firearms, related products, and training to the global military, law enforcement, and consumer markets. The company’s brands include Smith & Wesson®, M&P®, and Thompson/Center Arms™.
--YOU can do your own searches to see all under their current umbrella.
So, to sum it up I guess it depends on:
Why you bought,
If you really can afford to not touch that money
And are you willing/able to continue this level of risk.
We are all different with our strategies and needs. Should I suffer some catastrophic reason to need $$ this would be one of the last things I would sell. But like "you-know-whats", we all have an opinion!
____________________________________________________
"I regard giving as necessary to right the balance..." Hu Chung
"Please remember the 2nd Amendment each and every time you vote".....Cork
"If one does not understand a person, one tends to regard him as a fool".......Carl Jung
"...it's hard to explain...you can be much more alone with other people than you are by yourself...." Lucia Muir
“While open carry makes me uncomfortable (her words, not mine) my discomfort should have no bearing on constitutionally protected rights.” – Tyler Kee’s wife
