Smith & Wesson Scales a 52-Week High - Analyst Blog

On Jun 4, 2014, shares of Smith & Wesson Holding Corporation SWHC reached a new 52-week high of $16.61, finally closing at $16.38. The closing price reflects a gain of almost 77.7% over the past one-year period. Average volume of shares traded over the last three months stood at 1,633,250.

Smith & Wesson, a Zacks Rank #1 (Strong Buy) stock, continues to post strong results. The firearm maker has surpassed our expectation for the last 11 quarters. The company posted impressive third-quarter fiscal 2014 results with its earnings outpacing the Zacks Consensus Estimate on the back of higher sales.

The company's total revenues in the quarter increased 7.1% year over year, mainly thanks to a 29.9% increase in handgun sales. In January, Smith & Wesson received a healthy response for its newly launched revolver in the SHOT Show. The company also expects to receive solid orders for its California-compliant version of M&P SHIELD and SDVE polymer pistols in the future.

Smith & Wesson ended the third quarter fiscal 2014 with cash and cash equivalents (including restricted cash) of $45.3 million. The company's solid financial position helps it to maintain a systematic share buyback program. In March 2014, the company's board of directors authorized the repurchase of $30.0 million shares of its common stock.

The upbeat results allowed the company to revise its revenue and earnings guidance upwards for fiscal 2014. For fiscal 2014, the company has increased its revenue guidance range from $610.0–$620.0 million to $615.0–$620.0 million with earnings per share in the range of $1.39 to $1.42. The Zacks Consensus Estimate for fiscal 2014 is pegged at $1.43 per share.

Other Stock to Consider

Other stocks worth considering in the same industry include Net 1 Ueps Technologies Inc. UEPS, Malibu Boats, Inc. MBUU and Brady Corp. BRC. While Net 1 Ueps Technologies holds a Zacks Rank #1 (Strong Buy), Malibu Boats and Brady Corps. carry a Zacks Rank #2 (Buy).