Tag Archives: Smith and Wesson

Closing Our Our SWHC Short Idea With a 10.6% Return

October 28, 2009 – 4:02 pm

We are closing out our short idea in Smith and Wesson.  We are also removing the SWHC short position from our PAA Research SMid Cap portfolio.  Even though we think consensus estimates remain too high in light of building inventory in the gun dealer channel, we think the current stock price reflects the fundamental downside scenario.  [...]

By PAA Research | Posted in Firearms, Short Ideas | Also tagged , , , , , | Comments (0)

The “Obama Effect” One Year Later – What Firearms Dealers Are Saying Now

September 30, 2009 – 9:13 am

There is little debate that President Obama’s most effective economic stimulus has been for the broader firearms industry.  As soon as it became clear in October of last year that Obama would win the presidential election, gun sales took off.  Gun owners and firearms activists became concerned that a Democrat controlled Congress and White House [...]

By PAA Research | Posted in Firearms, Short Ideas | Also tagged , , , , , , , , , | Comments (0)

August NICS Background Check Data Shows First Month-to Month Sequential Improvment in a While, Key Questions Heading into SWHC’s 1Q10 Results

September 8, 2009 – 9:03 pm

The August data for the number of background checks conducted under the National Instant Criminal Background Check System (NICS) was released this morning. Overall, the total number of background checks increased 12.3% on a YOY basis and increased 11.2% on a month-to-month basis to 1,074,757.  This represents the first month-to-month increase since March of this year. [...]

By PAA Research | Posted in Firearms, Short Ideas | Also tagged , , , , , , | Comments (0)

Sturm, Ruger Strong 2Q09 Results, but Orders are Falling and Channel Inventories Rising – Back to Normalcy in the Firearms Market

July 29, 2009 – 8:55 pm

Sturm, Ruger& Company, Inc. reported 2Q09 results after the close.  You can view the results here.  The company reported revenues and EPS of $72.4 million (vs. $36.9 million 2Q08) and $0.46 (vs. $0.11 2Q08).  EPS beat the lone estimate available by $0.20.  We think EPS upside was largely factored into the stock following SWHC’s earnings [...]

By PAA Research | Posted in Firearms, Short Ideas | Also tagged , , , , , | Comments (1)

The June NICS Background Checks Are In – Another Sequential Month to Month Decline

July 16, 2009 – 11:54 am

The June data for the number of background checks conducted under the National Instant Criminal Background Check System (NICS) was released this morning. Overall, the total number of background checks increased 18.1% on a YOY basis, but declined 5.4% from May to 968,145. The overall number of background checks is at the [...]

By PAA Research | Posted in Firearms, Short Ideas | Also tagged , , , , , , | Comments (0)

June Traffic Data Suggests A Further Slowdown in Firearm Sales

July 14, 2009 – 1:30 pm

As we have noted in the past, we are actively following website traffic to the leading online gun dealers to gain a better gauge of current and future demand for firearms. Outside of the monthly data from the National Instant Criminal Background Check System (NICS), we view website traffic to the leading online gun [...]

By PAA Research | Posted in Firearms, Short Ideas | Also tagged , , , , , | Comments (1)

What To Do About Smith and Wesson (SWHC) Now

June 19, 2009 – 3:03 pm

SWHC shares have rallied dramatically today following the company’s positive pre-announcement after the close yesterday. As we highlighted in our original post on both SWHC and Sturm, Ruger (RGR), consensus estimates for SWHC’s 4Q09 were too low. In fact, here’s exactly what we wrote:
“We expect SWHC to beat 4Q09 earnings expectations, which will be [...]

By PAA Research | Posted in Firearms, Short Ideas | Also tagged , , , , | Comments (0)

Another Decline in Traffic to Leading Online Gun Dealers, Query Data Suggest Gun Sales Will Continue To Slow

June 8, 2009 – 3:04 pm

In our original post on Smith and Wesson and Sturm, Ruger, we argued that declining traffic to leading online gun dealers in April was a critical indicator that firearm sales would fall off sharply. According to Compete.com, the total number of unique visitors to the leading online gun dealers in April declined 11.6% from [...]

By PAA Research | Posted in Firearms, Short Ideas | Also tagged , , , , , , | Comments (0)

More Evidence the “Obama Effect” On Gun Sales Has Peaked – NICS Background Checks Decline 16.5% M/M from April to May

June 3, 2009 – 2:44 pm

In our original post on Smith and Wesson and Sturm, Ruger, we argued that these two stocks were poised to see significant downside as the “Obama Effect” on gun sales started to fade. A combination of lower visitation to the leading online gun dealers, rising inventory and slower sales expectations among dealers, and a [...]

By PAA Research | Posted in Firearms, Short Ideas | Also tagged , , , , , | Comments (0)