Schmacko (91.92)

Had to close Ruger :(

January 09, 2013 – Comments (2) | RELATED TICKERS: RGR

I actually discovered this company here in a players blog on CAPs.... though that blog was actually an endorsement for SWHC.  I'd heard of Ruger beofre then, but didn't know they were publicly traded and that blog was what made me research them and realize from a pure business standpoint the stock was terrific.  I'm closing the pick with a 400% gain and +340ish CAPs points.  Sadly I waited a little while to get into it in real life and bought into it multiple times, but 50ish% captial gains and another 18% in dividends collected (thanks special dividend!) isn't bad at all.

They still have no debt, and order backlog, revenue growth, pay a dividend, great fundamentals are almost guaranteed to have a terrific quarter and all the stuff I like in a company.

I'm not willing to gamble on Congress though.  There is going to be some kind of gun reform law passed, it's just a matter of how severe it is, and when it hits (I'm guessing sooner rather than later).  The short interst in Ruger is up to 49% meaning big money is betting that there will be reform and that it will impact Ruger's business.  It honestly doesn't matter if the Gun law hampers Ruger or not, the first day or two after it passes I expect the stock to take a big hit due to psychology if nothing else and I don't want to go along for the ride.  Once the hysteria passes fundamentals will probably take back over and the stock will rebound.  I'd rather clock gains now, wait for people to digest whatever the new law is and look for a new entry point down the road.

I totally wouldn't be suprised to see a 25% drop in the stock from the current price.  It's had some pretty big volatility in the past.  Oh well, its been fun.