Shares of Smith & Wesson Holding Corp (NASDAQ:SWHC) are up big today in anticipation of President Barack Obama’s Town Hall event, entitled “Guns in America”, which is slated to take place on CNN at 8:00 PM ET on January 7. Investors are reacting to the overall feeling that Obama will introduce tougher gun controls prior to him leaving office next year.
On first thought, one would think that tougher gun controls would hurt companies like Smith & Wesson Holding Corp (NASDAQ:SWHC), who generate revenue from more lenient laws. However, if buying firearms becomes harder, there will be a set date for those new laws to go into effect. This means that potential gun buyers would rush out to purchase new firearms prior to the laws going into effect. This could bring in huge short term revenue for gun manufacturers and retailers alike.
“When the government attempts to tighten gun regulation, near-term sales of firearms tend to go up,” said Rommel Dionisio, an analyst at Wunderlich Securities Inc. who covers Smith & Wesson. “Consumers are fearful of a certain class of firearms being restricted or legislated against.”
The stock is up 6.23% or $1.37 following the news, hitting $23.35 per share. About 3.54 million shares traded hands or up 58.74% from the average. SWHC has risen 49.42% since May 29, 2015 and is currently uptrending. It has outperformed the S&P500 by 51.55%.
From a total of 6 analysts covering Smith & Wesson Holding Corp (NASDAQ:SWHC) stock, 4 rate it a “Buy”, 0 a “Sell”, and 2 a “Hold”. This means that 67% of the ratings are positive. The highest target price is $27 while the lowest target price is $19. The mean of all analyst targets is $22.80 which is -2.36% below today’s ($23.35) stock price. Smith & Wesson Holding Corp was the topic of 9 analyst reports since July 24, 2015 according to the firm StockzIntelligence Inc. Lake Street maintained shares on December 9 with a “Buy” rating. RBC Capital Markets downgraded SWHC stock in a recent report from December 9 to a “Sector Perform” rating. Finally, Cowen & Co maintained the stock with a “Outperform” rating in a report they issued on an August 29.
The institutional sentiment increased to 1.34 in Q2 2015. It’s up 0.24, from 1.1 in 2015Q2. The ratio increased, as 22 funds sold all their Smith & Wesson Holding Corp shares they owned while 52 reduced their positions. 46 funds bought stakes while 53 increased their total positions. Institutions now own 38.66 million shares which is 6.17% less than the previous share count of 41.20 million in 2015Q2.
Royal Capital Management Llc holds 5.66% of its total portfolio in Smith & Wesson Holding Corp, equating to 125,000 shares. Eubel Brady & Suttman Asset Management Inc owns 594,998 shares representing 3.41% of their total US portfolio. Moreover, Hood River Capital Management Llc has 1.48% of their total portfolio invested in the company, equating to 634,327 shares. The Louisiana-based Price Capital Management Inc. has a total of 0.98% of their portfolio invested in the stock. Park West Asset Management Llc, a California-based fund reported 561,253 shares owned.
Since March 17, 2015, the stock had 0 insider buys, and 5 selling transactions for a total of $1.19 million in net activity. Cicero Robert J. sold 17,710 shares worth $312,922. Scott Robert L sold 3,800 shares worth $64,600. Golden Michael F sold 12,534 shares worth $217,174. Buchanan Jeffrey D sold 12,021 shares worth $223,023. The insider Monheit Barry M sold 20,000 shares worth $370,000.
Smith & Wesson Holding Corporation is a maker of firearms. The company has a market cap of $1.20 billion. The Firm makes an array of handguns, including revolvers and pistols; long guns, including modern sporting rifles, bolt action rifles, and single shot rifles; handcuffs, and firearm-related products and accessories. It has 22.65 P/E ratio. The Firm operates through two divisions: firearms and accessories.