Tuesday, June 25, 2013

Smith & Wesson Is Trying To Buy Back Shares

At $10 per share.  That's a nice profit (I bought my shares last year below $8), and it doesn't pay a dividend.  I am tempted to accept the tender offer.  Any thoughts?

3 comments:

Jim said...

In case you haven't pulled the trigger already, I thought I'd give you my 2 cents. I would hold on to it for a while. The gun control nuts aren't done yet and buying back stock is a bullish indicator. Of course if you need or want the money, you have about 25% profit and you'll never go broke taking profits.

Good luck!

Jon said...

Yes, that is a nice profit. However, whether to accept or not depends on your personal financial plans and needs, more than on the offer. Do you have somewhere else already lined up to re-invest the cash from the proceeds? Will it materially affect your tax situation this year? Will the stock go higher in price, or lower, in the next six months? Just a couple things to think about.

w said...

For what it's worth a quick search on google shows plenty of stock watcher sites that show most analysts expect the stock to go up. They think the stock is undervalued and the demand to drive sales and stock prices for at least the short term is strong. Surely this is also in S&W's stock buying plan. There is some stock buying cautions from analysts though that should the gun fear buying ease up sales could really drop.

IMHO while the gun boom could subside it seems likely between the perilous economy and the anti-gunners in DC it is more likely to be reasonably strong at the minimum. However my non-scientific observation is ammo is still mostly selling fast and guns are selling some but store inventories for many guns are now strong so supply shortages are subsiding for at least some models. A month ago AR's and Glocks were few and far between. Now they are easy to find in all the Ada and Canyon county stores...Dealers that sell used guns are more willing to price haggle and stores are no longer crowded with buying frenzies. Will that remain true for long--hard to say.

Unfortunately another crazy incident could easily lead to another run on stores and then S&W could go way up.

Wish I had some shares of them. I'm still not in the stock market...

S&W's MP series AR's and their Semi-auto pistols are popular though---I always see those going out the door--those blue boxes are easy to spot. Other than my model 41 and their 1911's I'm mostly only into their wheel guns myself....

Good luck with your decision!