View Full Version : Shares of Sturm Ruger are tanking. Down 8%. LOL
30 cal slut
07-30-14, 09:46
Ticker RGR.
Guess the panic bubble has come home to roost.
http://www.bloomberg.com/news/2014-07-30/sturm-ruger-tumbles-as-waning-gun-demand-hurts-profit.html?cmpid=yhoo
ColtSeavers
07-30-14, 10:08
Why is this cool and funny?
Why is this cool and funny?
Because they are only down 8% due to a completely predictable and expected decline in sales due to a completely predictable and expected decline in demand due to a completely predicable and expected decline in panic buying. Bloomberg seems to want to portray this as some kind of sea change in public attitude rather than simple market saturation. Wishful thinking.
I owned a chunk of Ruger stock back in the 1980s and kept it for quite a long time. The dividends paid my property taxes for years, but the bottom dropped out because Bill Ruger let things stagnate in his old age. Also, the stock market is fairly irrational anyway.
I took the money from the sale and "invested" it in a standby generator powered by natural gas. That way I have some meaningful resiliency, peace of mind, and a house that will be easier to sell at a higher price.
Lots of angles here that some analyst would never, ever pick up on. As per usual.
30 cal slut
07-30-14, 11:10
I just spoke to a hedge fund client invested in RGR.
It's not just the YoY drop in sales that is bothering investors (duh, like that should be a surprise).
It's also the 70% decline in gross margin (profit per gun before overhead) that is really rankling investors. Management says it's not due to discounting.
I think it's due to discounting/promotion of some sort that they're being cute with. Any FFL's want to chime in?
Smith & Wesson (SWHC) shares are down 4% in sympathy. I think Smith is in a bit of a different boat because it didn't ramp up production that huge (it couldn't keep up with demand during the panic) and therefore isn't sitting on a pile of inventory/orders.
However, that polymer frame/polymer frame striker fired pistol space is getting awfully crowded right now.
-The Walther PPQ is a great product and making inroads.
-The Sig P-320 shocked me. Nice trigger.
-HK VP9 is getting some rave reviews.
-While not striker-fired, the CZ P-07 and P-09 are gaining in popularity in the "value" pistol segment.
-Ruger's got a new LC9 that is striker-fired.
-Even Colt is testing out its 2nd prototype of a polymer-frame/striker fired pistol (designed overseas, of course) as I type this, hopefully they'll have something out for SHOT 2015.
We all know what's happening with EBR's, of course. But this is not terribly relevant to Ruger because the SR-556 and SR-762 rifles are probably less than 5% of Ruger's total gun sales.
And so on ....
Grand58742
07-30-14, 11:34
-HK VD9 is getting some rave reviews.
Do they make a pill for that? :D
I guess the question that I might have overlooked in the article is where are those stocks traditionally at? Down 8%, but how close to "average" is that number?
The blip for gun companies on the stock exchanges was to be expected. And it should be expected that they will drop. So the real question is how close to "normal" are they?
30 cal slut
07-30-14, 11:38
Do they make a pill for that? :D
LOL, typo.
Smith & Wesson was something like $5-$7 during the panic. My brother and friend invested in them at that time and got out while Smith & Wesson was in the 15's. I do not see Smith and Wesson falling to those levels but I could be wrong. If I remember correctly without looking at historical graphs, Ruger was somewhere in the high $30's to low $40's at that time, maybe just before the panic but was too expense to invest. Since their peak they have taken quite the drop.
Maybe it has something to do with Ruger & S&W choosing not to sell semi auto pistols in CA anymore? They gave the CA DOJ the middle finger in response to the stupid CA "Safe Handgun Roster". This may be a contributing factor to the decline in their sales. There are a lot of gun enthusiasts in the Golden State who can no longer buy Ruger & S&W handguns.
Eurodriver
07-31-14, 08:37
I am too busy buying BCM uppers w/ BCG for $399, cases of 5.56mm for $299 delivered, and PMAGs for $9.95/ea to be analyzing the performance of gun companies on the stock market.
I am too busy buying BCM uppers w/ BCG for $399, cases of 5.56mm for $299 delivered, and PMAGs for $9.95/ea to be analyzing the performance of gun companies on the stock market.
Links?
Links?
Ditto, ammo ones anyway. I know where to get the BCM uppers ;)
Eurodriver
07-31-14, 10:08
Gunbroker. Iraqgunz posted a link a while back and they pop up all the time.
If you don't want to wait for deals, AIM has a case for $339.50 delivered right now.
HackerF15E
07-31-14, 13:58
RGR is still well up from the "baseline" pre 2012 election year level when it was in the high 20s/low 30s.
Anyone with any forethought bought it before the pre-election year runup, which was followed by the Sandy Hook panic insanity. Those same folks should have seen firearm demand peak and start downhill in late '13 and sold.
So lets buy a Ruger product next week and boost its sales.
Simple economics......
A lot of people, surprisingly including many members of the usually more professional M4C site, complained of companies "gouging" during the last panic.
Reasonable members argued that it is simple economics and that those companies better get the goods while it can be got, because the panic will be over eventually and sales would stagnate for a looong time afterwards.
But, you won't see the gouge-whiners complaining of the $800 Colt 6920's out there now.
Simple economics......
Belmont31R
08-02-14, 02:13
Simple economics......
A lot of people, surprisingly including many members of the usually more professional M4C site, complained of companies "gouging" during the last panic.
Reasonable members argued that it is simple economics and that those companies better get the goods while it can be got, because the panic will be over eventually and sales would stagnate for a looong time afterwards.
But, you won't see the gouge-whiners complaining of the $800 Colt 6920's out there now.
Simple economics......
A little more to it than that but I'd say it's kind of expected and not really a bad thing. Negative 8 isn't really terrible if you're still 20% above where you were a year ago. There's a reason for that which can be explained and wouldn't panic long term investors.
The entire market is tanking based on fears the FED will no longer be buying as much debt and interest rates will rise more quickly than anticipated. So, the speculation on Ruger's sales being the cause is only one small portion of the story. I assume savvy investors expected a drop in sales given the huge acceleration of 1 year ago. Those expectations were already built into their share price.
The entire market is tanking based on fears the FED will no longer be buying as much debt and interest rates will rise more quickly than anticipated.
Thats no fear, thats a fact. Sept or October the fed will end QE3. The drops of the last week(really the last couple weeks) are from the initial 10 billion reduction from QE3 they started 5-6 months ago(it takes about that time to start seeing changes in the economy on either the front side or back side of a round of QE). Then they have to watch for rising inflation(a sign that the economy is accelerating on its own-a good thing actually, but not to the fed). To counter this they have to "tap the brakes" so to speak by raising interest rates and slowing the economy. Hit the brakes to hard to early and the economy will completely stop or reverse course. Its a delicate operation that I am 100% sure the Fed will **** up royally and send us back into another recession.
Im just watching the S&P 500 for the death cross personally.
Yep, it is only a matter of time.
Powered by vBulletin® Version 4.2.5 Copyright © 2024 vBulletin Solutions, Inc. All rights reserved.