On May 27, Zacks Investment Research upgraded
Smith & Wesson Holding Corporation
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Smith & Wesson has been reporting strong financial results
and surpassing our estimates for the last 11 quarters. The company
ended the third quarter of fiscal 2014 with earnings of 35 cents
per share which surpassed the Zacks Consensus Estimate of 29 cents
The company's total revenues in the quarter increased 7.1% year
over year, mainly due to a 29.9% year-over-year increase in handgun
The company is focused on the development of new products. In
January this year, Smith & Wesson launched a new revolver in
the SHOT Show, which was well received by its customers. The
company expects to receive solid orders for its
California-compliant version of M&P SHIELD and SDVE polymer
pistols in the future.
These products are expected to offset the impact of those
M&P pistol models that will not stay on the Roster. Both the
M&P Shield and the SDVE pistols are projected to remain on the
California Roster of Handguns Certified for Sale as long as no
changes are made to those models. The company for that very reason
does not plan to make any changes.
Smith & Wesson maintains a sound balance sheet. The company
had around $45.3 million in cash and cash equivalents (including
restricted cash) at the end of the last reported quarter.
Management has also shared the benefits with its shareholders
through systematic buybacks. From Dec 2012 to Jan 2014 the company
repurchased $135 million of its common stock. Recently, the
company's board of directors authorized the repurchase of $30.0
million shares of its common stock.
Other stocks worth considering in the same industry include
Net 1 Ueps Technologies Inc.
Malibu Boats, Inc.
). While Net 1 Ueps Technologies holds a Zacks Rank #1 (Strong Buy)
Malibu Boats and Brady Corps. carry a Zacks Rank #2 (Buy).
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