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Investing in gun company stocks (company stocks, not rifle stocks)

Discussion in 'General Gun Discussions' started by bds, Mar 22, 2012.

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  1. bds

    bds Member

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    Anybody invest in gun stocks? I stock trade as a hobby and have traded S&W (Nasdaq: SWHC) and Ruger (NYSE: RGR) in past years.

    Recently, S&W went from $3 in December 2011 to over $7+ - http://finance.yahoo.com/q?s=SWHC

    As a happy owner of M&P40 and M&P45, glad to see S&W doing well as a company. :D
     
    Last edited: Mar 22, 2012
  2. rcmodel

    rcmodel Member in memoriam

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    I thought you were buying up all the exhibition grade walnut stock blanks there is left?

    That might be a good investment too!

    rc
     
  3. bds

    bds Member

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    Doh! I guess that could be confusing for some.

    I edited the thread title to clearify.

    Thanks!
     
  4. DesertFox

    DesertFox Member

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    Some analysts suggest ammunition manufacturers stocks, moreso than firearms manufacturers.
     
  5. Pate

    Pate Member

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    I bought Ruger and S&W before the last election. My broker called me Thursday asking me why I thought they were going to be a good investment even though he felt otherwise.

    I'm up over 5x on Ruger and 2x on Smith.

    He didn't know about my gun obsession. He now understands.
     
  6. bds

    bds Member

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    Well, just wanted to give you an update.

    Technical stock trading (trend/swing trading) is my other hobby from reloading/shooting (I have a full-time day job and it is not stock trading. ;)).

    Yes, I am a fan of S&W/M&P and since the beginning of the year, share price has more than doubled (100%+). Will S&W follow the footsteps of Ruger when it went from $10 to $50 (2010 - 2012)? Time will tell.


    One year chart (2012) of S&W


    [​IMG]


    Three year chart (2010-2012) of Ruger


    [​IMG]
     

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    Last edited: Sep 28, 2012
  7. Big_E

    Big_E Member

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    That is cool to see how much those stocks have gone up.

    I keep telling myself to invest in stocks but I never get around to it. Being in the know of certain hobbies has it's benefits.

    Back when AMD and Intel were still competing closely, I tried to convince my dad to buy Intel stock when one of their new processors was about to come out, now they pretty much own the CPU market. Can't remember the prices but we could have made some bank. We also wanted to buy GE stock when it was extremely low a few years ago, now it's about triple.

    Now that I am majoring in business I think I will finally get around to it. Do you feel like now is a good time to buy? Obviously Ruger and S&W are very popular right now I haven't given any company much thought lately.
     
  8. bds

    bds Member

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    Well, don't know what to say. Here's 3 year chart of ATK (Federal, Speer, CCI)

    [​IMG]



    And here's 3 year chart of OLN (Winchester)

    [​IMG]
     

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  9. bds

    bds Member

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    That's like asking, "Do you think I can hit a soda can at 1000 yards with my rifle?" Yes, it can be done but it will take some work. ;)

    I started this thread to demonstrate that we can invest in companies that are part of our hobby and perhaps share the gains and suffer the losses together. :D

    As to the "work" part, learning objectives are:

    - Learn to read stock charts
    - Learn the primary technical indicators (Moving Averages, RSI, MACD, etc.)
    - Identify rebound signals to prepare for long positions
    - Set "buy" points
    - Identify "hold" signals
    - Set "sell/take profit" points
    - Swing trade within a channel
    - Set "exit" point
    - Identify "short" signals to prepare for short positions
    - Set "short" points
    - Set "cover" points
    - Identify rebound signals to prepare for long positions (and repeat)

    If you are interested or have questions, PM me.
     
  10. JustinJ

    JustinJ Member

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    I gota wonder if the climbing gun stocks trend may be coming to an end. The market is now so saturated and many who feared not being able to get certain guns down the line have already got them.
     
  11. Hugo

    Hugo Member

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    ATK makes Federal Ammo, but most of their money comes from Rockets and space launch vehicles. They made the solid rocket boosters for the Space Shuttle so they lost a good contact when they retired the Space Shuttle. Hopefully they will make something else to regularly get Astronauts into space soon.
     
  12. N003k

    N003k Member

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    I don't have much free cash at the moment, but, I actually do have some money invested in Smith and Wesson. Wish I had gotten the shares when it was at 3$ a pop, but, I've already got a decent return from them.
     
  13. SunnySlopes

    SunnySlopes Member

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    I analyzed the financials of Smith and Wesson last year. S&W stocks had risen dramatically over the past several years and the improvement in their position is 100% attributable to Obama. Smith and Wesson executives actually admitted such in their 10K report of 2011, page 20, item 1A filed on 6/30/2011.

    “Political and other factors also can affect our performance. For example, we experienced strong consumer demand for our handguns and modern sporting rifle products beginning in our third fiscal quarter ended January 31, 2009, following a new administration taking office in Washington, D.C., speculation surrounding increased gun control…….”

    I also analyzed their balance sheets from 2006 through 2010, inclusive. A good barometer of their liquidity is their cash and cash equivalents. (The figures are in millions of dollars.) In 2006 C&CE totaled $731,000. That’s not good for a corporation the size of S&W. Heading into the election in 2007, the panic was already starting and their C&CE jumped to $4,065,000. 2008 it’s still increasing to $4,359,000. In 2009, C&CE skyrocketed to $39,822,000. The figure remained roughly the same for 2010.

    Not to sound morbid, but if Obama gets re-elected, I predict in his second term he will show his anti-gun side which will create tremendous demand for firearms. Gun company stocks will (I’m guessing) go through the roof. It doesn't have to do with market saturation. It has to do with the public's perception of the future.

    However, given the history of the Republican candidate’s position on guns, he might have a similar impact on the gun buying public. Neither candidate is a friend of gun owners which makes both candidates good for gun companies.

    That’s the morbid part.

    Now if somehow we managed to elect a staunch supporter of the 2nd Amendment and gun owners relaxed, it could be a different story.
     
  14. 351 WINCHESTER

    351 WINCHESTER Member

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    I want to know why my wife can't have more control over her 401K.
     
  15. gearhead

    gearhead Member

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    Exactly. Ammo manufacturers tend to be more widely diversified defense or chemical companies, both are sectors that aren't doing exceptionally well in today's political and economic climate. I wouldn't necessarily invest in a firearms company that was heavily weighted in military contracts either, such as Colt.
     
  16. psyopspec

    psyopspec Member

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    I'm a full-time options trader. A couple weeks back I made out on a RGR call spread okay when the stock rose after SWHC reported earnings (sectors can sometimes rise or fall depending on peers).

    I do invest some money, but most of what I do would not qualify for that term. At this time I wouldn't be looking at either for a longer term investment, but I haven't done due diligence on the companies and my opinion is based on subjective research that, quite frankly, there are just better opportunities out there right now in the market.
     
  17. thefish

    thefish Member

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    Do tell. Where would you be for long term right now?
     
  18. bds

    bds Member

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    Well, I won't post my sentiment on S&W ... time will tell, as always.

    I'll check back in about 3-6 months.

    Until then, it's short-term swing trading/channel trading time for me.
     
  19. psyopspec

    psyopspec Member

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    I need to say up front I do this only for myself and I have no formal education in finance. Therefore, don't do what I do and you'll probably be better off for it. :)

    Again, most of my positions are held for a period of hours, or weeks. I do maintain longer-term investments in my IRA. On this list, AIG is the only one I don't currently own, but am likely to buy into over the next two weeks:
    O: Real Estate Investment Trust that pays a monthly dividend.
    AAPL: Owned via a long-term call option expiring in 2015, since I don't have enough money in the account to own several shares outright.
    FB: I believe the weak/speculative hands in facebook have mostly been shook out. I bought it at 17.71 in early SEP, and their announcement today about running what basically amounts to a gift registry that one can use without leaving the house has me feeling okay about the long-term prospects of the company.
    AIG: I'm not pro-bail out. But, the government is almost entirely out of this company as they've become profitable again, and their P/E is hanging at about 3. I wouldn't be surprised if they managed a double in the next year.

    I also sell call options against my positions to increase my returns annually.
     
  20. SunnySlopes

    SunnySlopes Member

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    If I were you I'd stay as liquid as possible until after the election at least.
     
  21. bds

    bds Member

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    Bought back SWHC on the recent dip. Looks like RSI hit bottom and MACD is ready to crossover - Plan to sell again as RSI approaches 70.

    [​IMG]
     

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  22. wodaddy

    wodaddy Member

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    I think SWHC might be a buy after it closes the gap. That big black candle is scary.
     
  23. bds

    bds Member

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    Well, looks like investors/traders are expressing their sentiments with their pocketbooks. Strong buy pressure today.
     
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