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After Smith & Wesson (Nasdaq: SWHC) spent the past six months at a mediocre three-star rating, more top-performing CAPS members are voting bullishly for it these days, enough to upgrade it to a more formidable four stars. A total of 739 members have given their opinion on Smith & Wesson, with many offering analysis and commentary explaining the recent optimism.
Fewer consumers have spent money at Home Depot (NYSE: HD) or bought a new Ford (NYSE: F) SUV over the past year in the "new normal" economy. But the rush to buy guns and ammo that began late last year, sending consumers to gun shows and retailers like Cabela's (NYSE: CAB) and Wal-Mart (NYSE: WMT), is still going strong. The rush has eased, but sales have been up by double-digit percentages in every month since last October, except July, according to the National Shooting Sports Foundation. Firearm manufacturers like Sturm, Ruger (NYSE: RGR) and Smith & Wesson have booked solid sales and backlog, and ammo makers like ATK and Olin (NYSE: OLN) are still trying to keep up with demand.
Smith & Wesson recently beat analysts' expectations, reporting fiscal first-quarter earnings of $12.6 million compared with $2.3 million a year ago, with a 30% increase in revenue. It also predicted greater-than-expected revenue for its second quarter. Many investors thought that consumer firearm demand would slow by summer, but consumer sales remained strong, as did law enforcement and international sales. The company has continued to supply police forces in Mexico and signed contracts with multiple state agencies in Washington state.
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