PreMarket Prep Stock Of The Day: American Outdoor Brands

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

Although a majority of the major U.S. companies have reported earnings for the quarter, there are still some smaller companies out there. One of those companies is American Outdoor Brands Inc. AOUT and is the PreMarket Prep Stock Of The Day.

The Company: American Outdoor Brands Inc, formerly known as Smith & Wesson, was its principal brand for firearms up until the company was spun out in 2020. The company is engaged in the business of providing outdoor products and accessories for hunting, fishing, camping, shooting, and personal security and defense products.

Fireworks Off The IPO: The company made its debut on Wall Street as a separate company in August 2020. In its inaugural session, it opened at $18.18, which turned out to be its high for the day and closed on the low-tick for the session at $15.50.

In a miraculous turnaround the following day, it bolted to $30.01 and retreated to close at $19.40. After those two volatile sessions, the issue breached its initial IPO low on the third day of trading and didn't bottom until October at $12.68.

A year-end rally nudged shares to $17.03.

On Target In 2021: The issue had back-to-back monthly gains in January ($17.03 to $18.98) and February ($18.98 to $20.01). The Street was leaning long into the report as it rallied from $20.01 to $23.22 this month, with all of the gains coming in the last two sessions ($21.92 to $23.22).

Before the open, the company reported third-quarter earnings of 82 cents per share, up from 13 cents year over year, and better-than-expected sales results. The company also issued 2021 EPS and sales guidance above estimates.

In only its third report as a separate company, it has increased EPS and sales in all three quarters. EPS has risen from 36 cents to 82 cents and sales from $50.47 million to $82.65 million.

PreMarket Prep Take And Moving Forward: Dennis Dick wasn't surprised at the report: “Outdoor stocks are hot now and likely will continue to be hot.”

When the issue was being discussed on the show, it was already trading higher by nearly $4 in the lower $27 handle. The only identifiable resistance was its all-time high from last August at $30.01, which was still another $3 away. Instead, investors looking to exit the issue in Thursday’s session may want to consider scaling out on the way at the half and whole numbers to sniff out a major seller; For example, offers at $27.50, $28.00, $28.50 and $29 etc.

That strategy wouldn't have enabled one to nail the intraday high ($28.89) but would have yielded an average cost well above its current price of $27.50 as of 1:15 p.m. EST.

The full discussion on the issue from today’s show can be found here: