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Firearms Sales Running Low on Ammo?

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March 16, 2010 – Comments (2) | RELATED TICKERS: SWHC

Smith & Wesson reported earnings late last week and the stock price has taken a hit.  Some data is indicating the ballistic runup in firearms sales has recently shifted to a downward trajectory.  

Here's a quick rundown.

What's your opinion?   Buy, sell or wait for a clearer shot?

Fool On!

Russ

 

 

2 Comments – Post Your Own

#1) On March 17, 2010 at 12:07 AM, awallejr (85.46) wrote:

Well people stocked up on those guns and bullets last year, but since there was nothing to shoot at in the end demand dies down.

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#2) On March 17, 2010 at 1:09 PM, ikkyu2 (99.27) wrote:

The last time I looked at SWHC, I noticed a couple of things:

1) Revenues from the core business, firearms manufacture and sales, have been flat for decades.

2)  The company is drowning in debt, is wholly owned by its bondholders and then some, so you are buying negative equity when you buy a share.

3)  The business plan has nothing to do with building or selling more or better firearms; the idea is to leverage the S+W brand onto security systems, personal defense devices like electric shockers, barbecues, clothing, and so on.  While this is not a bad idea I think I'd probably rather be in Hot Topic, Collective Brands, Gap, or any of a zillion other businesses whose main business plan is monetizing a retail brand.

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