Sturm, Ruger & Company (NYSE:RGR)

CAPS Rating: 4 out of 5

The Company is principally engaged in the design, manufacture, and sale of firearms and precision investment castings. The Company's design and manufacturing operations are located in the United States.


Player Avatar Bryand1972 (< 20) Submitted: 12/23/2012 1:01:55 AM : Outperform Start Price: $40.12 RGR Score: -58.78

Ever since Obama took office gun sales have steadily increased. After he was re-elected gun sales went up for fear of regulation. They became overbought around $60 and came crashing down again to an oversold status (around $47 a share) . Considering RGR's increase in book value since Obama took office and the fact the he will be in office four more years, the stock's reasonable valuation at 13 times earning plus a dividend became a no-brainer. Then Newtown happened and funds, sporting goods stores, and short sighted investors started dropping RGR like it was the plague because they didn't want any stigma attached to them for perpetuating another mass shooting like this. Obama came out and said they would pursue gun control legislation. This had two effects. One, gun sales and background checks skyrocketed into record numbers because gun enthusiasts became fearful of new anti-gun laws. Two, the price of the stock went down even more because of uncertainty, making it an absolute steal from a valution perspective. As the price comes down and gun sales go up risk is diminished. Any legislation that is passed will be watered down by the Republican House and becasue of the 2nd Amendment. RGR will either raise guidance OR a brave analyst will upgrade the stock at some point in the near future. This will signal it's "OK" to buy again. Emotions are high right now but they will eventually come down and then the voting machine will turn once again into a weighing machine. I'm in at $43.59 with high conviction.

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