Shares of Sturm Ruger are tanking. Down 8%. LOL

[30 cal slut]

Ticker RGR.

Guess the panic bubble has come home to roost.

http://www.bloomberg.com/news/2014-0...tml?cmpid=yhoo

[ColtSeavers]

Why is this cool and funny?

[Hmac]

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.

[Dienekes]

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]

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]

-HK VD9 is getting some rave reviews.

Do they make a pill for that?

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]

Do they make a pill for that?

LOL, typo.

[murphman]

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.

[a1fabweld]

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]

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.