Wednesday, April 29, 2009

Guns: One of America's Last Growth Industries - Sturm Ruger & Co (RGR) Beats; Huge Backlog Growth

I was trying to figure out why Smith & Wesson (SWHC) was surging 10% today outside of general "glee"; I didn't realize that peer Sturm, Ruger & Co (RGR) reported last night. Well folks, we might be shrinking most of our industry especially of the manufacturing sort - it was either guns or butter - we still have massive defense contractors and guns. They will never take that away from us. RGR beat estimates of $0.24 handily ... with $0.30. Go team USA. I need to add to my SWHC position... wow look at these metrics. This stock is below 15x forward earnings for massive growth while people are bidding up shrinking companies at 30x forward earnings. Just love the stock market.
  • Sturm, Ruger & Company, Inc. (NYSE: RGR - News), announced today that for the first quarter of 2009, the Company reported net sales of $63.5 million and earnings per share of $0.30, compared with sales of $42.5 million and earnings per share of $.07 in the first quarter of 2008.
Wow that is 50% revenue growth. Guns and masses of unemployed... a magic combination to look forward to in the year ahead.
  • The level of demand for our products during the first quarter of 2009 has been unusually high, with more than 500,000 units ordered.
  • Our firearms sales grew 55.5% from the first quarter of 2008 and 8.7% from the fourth quarter of 2008.
  • Our backlog grew to 458,900 units and $136.3 million at the end of the first quarter of 2009, from 175,900 units and $47.8 million at the end of 2008. (wow! 160% unit growth and 183% dollar growth)
Sturm, Ruger was founded in 1949 and is one of the nation’s leading manufacturers of high-quality firearms for the commercial sporting market.

[Apr 12: 60 Minutes - the Way of the Gun]
[Apr 9: Some Link Economy with Spate of Killings]
[Apr 6: Starting Smith & Wesson Position]

Long Smith & Wesson in fund; no personal position

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