Wall Street Is Nuts

Smith & Wesson Stock Drops
As Order Backlog Reduces
To ONLY $333 Million

That’s still at least a solid year of production, isn’t it? Just about, and that’s at their current, ramped-to-the-max production rate.

Shares of Smith & Wesson Holdings fell Friday, declining about 6% on worries over slowing demand. While the firearms maker posted robust increases in second-quarter profit, a decline in its backlog raised a red flag with at least one analyst. “We note that the company’s order backlog is now $333 million, down sequentially from $392 million last quarter and $439 million two quarters ago,” wrote Rommel Dionisio of Wedbush. “While still high on a historical basis, this appears to indicate dealers who place such orders do not expect the now year-long industry demand surge to last that much longer.” Smith & Wesson was down 57 cents at $10.28.

Far more than 57¢; this morning it was going for $8.29, which is a drop of around $2.50, or about 18%.

Which is absolutely insane. The company is just about minting gold these days. They’re really only a $150-$200 million in sales company, and they’ve been hitting $300M plus, since Obama got elected the first time. And by working their butts off, churning OT like mad, investing hugely in their production assets, they’ve been able to reduce a sales overhead by $100 million.

A sales overhead. Horry Clap!!

Name another kind of business that has people lined up around the world waiting to buy their product. Ok, Mac. Fine. But Macintosh is huge. S&W is a gun factory not much bigger than 3 large supermarkets. It ain’t GM. So now that they’ve spun straw into gold so fast that the hay barn is now only 90% full, their stock has taken a tumble. Because they’re risky and investors are worried. Gadzooks. Investors are morons.

PS - Oh Wall Street? Actually go to one of S&W’s retail points. A gun store. And see if you can find a single new product of theirs sitting around waiting for a buyer.  Not one. Heck, right now you’ll be lucky if you can find a single second hand product of theirs less than 5 years old. Sales are booming like never before, and keep right on booming year after year. And they just took another fat spike in the past couple weeks.

So scuttle their stock.

No wonder we’re in a permanent recession. These guys are mental.

Update: Fox Sux. Never mind, mostly. Sorta. Fox Sux. They linked this story in this morning AS IF IT WERE TODAY’S NEWS but it’s actually from 12/07. But still ... an 18% drop in 3 weeks for the stock of 100% American company that is going gangbusters. So I guess my opinion is still valid. Nut jobs in suits.

Posted by Drew458    United States   on 12/27/2012 at 02:55 PM   
  1. Excellent! Just called my broker - to buy. Wasn’t in (the turd), so I did it on-line. Order confirmed…

    Posted by ooGcM taobmaetS    United States   12/27/2012  at  03:38 PM  
  2. S&W is in play - and rising. 10x the trade volume from normal. They just completed a $15 million buyback a little while ago.

    Posted by ooGcM taobmaetS    United States   12/27/2012  at  03:45 PM  
  3. Another one of those insider manipulations Rico loves to write about??

    Posted by Drew458    United States   12/27/2012  at  07:14 PM  
  4. Wonder if I can get a discount on their Commander model? I could use another 1911, and I can trust S&W quality.

    Posted by cmblake6    United States   12/27/2012  at  11:44 PM  
  5. Smart move for anyone who can and bravo to all who made a Buy order.

    Posted by Rich K    United States   12/28/2012  at  01:53 AM  
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