Financial columnists seem to be paying attention to gun companies these days, despite assurances from Josh Sugarmann the industry has been in decline. They note the following about Smith & Wesson meeting its earning mark:
Now to be fair, it wasnâ€™t Smith & Wessonâ€™s firearms division that misfired. In fact, revenue from the companyâ€™s primary division climbed to $79.2 million from $74.7 million a year earlier. The drag on Smith came from its perimeter security division, which saw a 38% drop in revenue as businesses and the government spent less on its perimeter security systems.
Doesn’t fit the VPC narrative, does it? In other news, I had no idea Smith & Wesson had a perimeter security division. When I think perimeter security, I think these:
6 thoughts on “That Ailing Industry”
About a year ago I invested some $$$ in SWHC in my “play money” portfolio (I keep some dough on the side to mess around with in individual stocks and such). As an enthusiastic M&P owner, I thought I had some “private information” that the market had not priced in, namely, the appeal and effectiveness of the M&P line vs. the competition, especially for police dep’ts and such.
The big question as an investment has been the perimeter security firm, which SW added on relatively recently. The market has been very mixed about this subsidiary, which isn’t really related to S&W’s core business and comes with a lot of debt issues. I’m not wild about it either and wouldn’t be surprised to see it spin off.
Still, I am enthusiastic enough about sales of the M&P and other related products to at least hold my current position and possibly even a cautious “buy.” THe security division is a big wild card though.
Full disclosure: I hold a modest position in SWHC.
The company used to be USR. S&W bought them. Link to company is here.
I love the little disclosure at the end
“Disclosure: At the time of this writing, Jim Woods held no positions in any of the stocks mentioned here. He does, however, own a Ruger SP101, and a Smith & Wesson SW19”
Sort of deflates the lol from the old sign “this house protected by Smith and Wesson”.
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