Sturm, Ruger & Company (RGR)

This met a high level screen to indicate a buy and strong outperform against its peers (other tickers in its industry). My 1st version of this spreadsheet devles deep into the company's balnace sheet and recent income statements, combined with other relevant price data for the company including insider/institutional holdings, short interest, debt levels, etc.
Testing capabilities of this 1st version of my automated, valuation spreadhseet matched with my personal criteria and see how it holds up.

Barack Obama...gun salesperson of the year!

Sturm Ruger is one of the U.S.'s largest firearms makers. The recent firearms "bubble" is bursting, but Ruger still looks somewhat cheap.

http://www.magicdiligence.com/articles/sturm-ruger-RGR-2009-11-10

THIS IS A BUBBLE ABOUT TO POP I love ruger's product. But the drive behind their outstanding sales wasnt their product, it was paranoia. Many gun owners were fearful that Obama would resurrect the Clinton era gun ban. Thus causing a surge in purchasing of high capacity firearms and ammunition. But now even the most right wing gun owners, are now realizing Obama has to much on his plate to worry about gun control. Or bought so many guns and ammo they can support their own army. So they dont need to buy any more.

Because people (and I'm people) are going to arm themselves in times of uncertainty. People who never ever though of being gun owners are now doing so... almost at an alarming rate. As big government does as it sees fit, "the right to bear arms" could be stricken from the constitution at any moment. Not that it will be any time soon. But many are looking to protect themselves and their families. Lean times cause normal people to do abnormal things. Coming from a family long in law enforcement, I see both ends of this volatile issue. Responsible gun ownership actually cuts crime in some areas. Just ask the folks in Kennesaw.

Custom screen

This account tracks the performance of the investment firm Ruane, Cunniff, and Goldfarb - the investment manager of Sequoia Fund.

They keep raising the dividend, growing cash flow, growing customer base, growing margins, reducing inventory, and just all around executing extremely well. RGR has retrenched and remade themselves over the last few years and it's now paying off. Don't listen to folks who say this is only a fear trade pick - RGR's management has changed the way they do business and it's showing on the balance sheet.

I dont mean to be offensive here, and i rarely quote liberals, but you have me this one time sayin, its the guns stupid.

1/25 in Leisure Products -(79.6 @ A+/B+)

Green thumbed in large part due to this blog from SarahGen, which was actually talking more about SWHC, but oh well:
http://msncaps.fool.com/Blogs/ViewPost.aspx?bpid=191296&t=01009900444600847326

Ruger is one of the two publicly traded americano gun manufacturers. They have little debt and a large back log. They were recently added to the Russell 3000 and paid a dividend this year for the first time since 2005. Most companies are cutting dividends, but RGR is reinstating theirs to help spread the joy of their recent success. I like that. The addition to the russell could get it more exposure and action from index funds, which probably cuts both ways, but I think is a positive overall.

The stock has had a pretty good run this year but I think there's still some upside left to it.... especially if all the doomsayers are right and the zombie apocalypse happens.

This company LITERALLY cannot make their products fast enough to keep up with demand.

Yes I know about the recalls of the SR9 and maybe even the LCP pistols. DON'T WORRY ABOUT IT.

Do you know how hard it has been historically to get high capacity magazines for Ruger Mini 14 and Ranch rifles? IMPOSSIBLE unless you wanted to pay $125 each for them. Now Ruger is selling them online and they are going as fast as they can make them.

I'm LOOOOONG on Ruger baby!

sales can't hold.

We had a gun show in town a few weeks ago people were standing around the corner waiting to get in. Plus Obama has everyone scared they will lose their gun rights.

Funny how the stock's performance relative to the S&P started to take off at about the time of the change in the Mandate of Heaven, innit?
IBD gives RGR a 96 Smart Select rating and a 99 Relative Price Strength rating. Return on Equity is a little on the low side at 12.23%, but yoy quarterly revenue growth is north of 70%. It's that Mandate of Heaven thing, and I think the company will continue to do well until the Democrats in Congress make good on their pledge to disarm the hoi polloi. At that point, it's all over, and they will be dependent on military and law enforcement contracts for survival.

A company that appears better valued compared to its peers. It operates in an industry outside of the FIRE sector of economy (FIRE = Financial, Insurance & Real Estate).
The valuation to earnings potential going forward appears favorable, may result in rewarding, long-term future dividends, and are screaming buys compared to its peers in its industry.

BUY

bullish on oln, rgr

(bearish on dow, swhc)

I'd offset these buys with short sales on its peers to bank the difference as the market moves goign forward. This will likely kill the S&P 500 going forward.

These picks are within this CAPs account that is market neutral - all longs are offset by a short. All long & short picks are diversified across industries & world location to limit downside exposure. This CAPS account will maintain at the very least 20 picks and at the very most 80 picks. Picks will be ended in long/short pairs to remain neutral.

The Obama administration has caused a run on gun stores.

Gun consitantly sales up since Obama was elected. Democratic congress likely to try to enact gun legislation during his term which will frighten many into buying before it goes into effect.

Obama is in office, national firearms prohibitive acts are coming and people are scrambling to purchase as many firearms and ammunition before these acts are enabled.

Hoardes of cash for this niche and it will only continue.