Smith & Wesson to Buy Back More Shares - Analyst Blog

Smith & Wesson Holding Corporation SWHC announced that its board of directors authorized the repurchase of $30.0 million of the company's common stock. The company expects to start the latest share buyback program no sooner than the beginning of fiscal 2015 (May 1, 2014).

In the third quarter fiscal 2014 the company used $15.3 million in cash from financing activities, mainly for its stock repurchase program. The company repurchased $135 million of its common stock at an average price of $11.01 from Dec 2012 through Jan 2014.

The new authorization by Smith & Wesson is duly supported by the company's solid financial position, with cash and cash equivalents (including restricted cash) of $45.3 million as of Jan 31, 2014. Operating cash was $29.6 million in the third quarter of fiscal 2014.

Smith & Wesson, a Zacks Rank #2 (Buy) stock, has been posting strong financial results and surpassing our estimates for the last 11 quarters. Management has also shared the benefits with its shareholders through systematic buybacks. Since Dec 2012, the company reduced the outstanding shares of the company by 19%.

For the fiscal year ending April 30, the company lifted its earnings per share guidance to the range of $1.39 to $1.42 from its prior expectation of $1.30 to $1.35. The revenue guidance has also been boosted to the range of $615 million to $620 million from $610–$620 million earlier.

For fiscal 2014, the Zacks Consensus Estimate increased 8 cents to $1.43 per share while for the fiscal fourth quarter the consensus increased 3 cents to 40 cents per share over the last 30 days.

Some stocks in the same sector looking equally good include Marine Products Corp. MPX, TASER International Inc. TASR and Alliant Techsystems Inc. ATK, all with a Zacks Rank #2 (Buy).