Arm Your Portfolio

 | Oct 01, 2012 | 1:00 PM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

swhc

,

rgr

There are a few reasons to take a look at the firearm sector at present.

During dangerous times, people take matters into their own hands, instead of relying on bureaucrats and statutes to defend life and property. Also, if the Fed continues printing money to paper over our struggling and deteriorating economy, civil unrest is not out of the realm of possibility for the United States.

Two companies that stand to benefit from this are Sturm, Ruger (RGR) and Smith & Wesson (SWHC).  

Smith & Wesson provides products and services for safety, security, protection and sports in the United States and internationally. The company sells its products under the Smith & Wesson brand, the M&P, the Thompson/Center and the Walther brand names.

Based on its own projections, the company expects a 40% gain in revenue for fiscal 2013. 

Technically, Smith & Wesson has been in a rising channel for 2012, which shows solid interest from buyers. With SWHC at the top of its channel, we can expect a pause in its upward movement here that allows new buyers to jump on board. The MACD indicator (circled) has been trending well above its horizontal zero line for all of 2012 which shows solid upside price momentum.

 

Smith & Wesson (SWHC)
Source: Metastock and Leibovit VR

 

At VRTrader.com, we currently have a price target range of $12-15 for Smith & Wesson for our Platinum clients. 

Sturm, Ruger engages in the design, manufacture, and sale of firearms in the United States. It posted a 63% rise in its EPS last quarter and analysts expect another jump of 43% this quarter. While holders of Sturm Ruger shares had to endure a rather brutal selloff during the month of May, the stock seems to be back on track, up 44.6% off of its June low. The MACD indicator (circled) is now showing signs that a strong uptrend is developing as it is moving farther into positive territory after crossing above its dashed signal line. 

 

Sturm, Ruger (RGR)
Source: Metastock and Leibovit VR

 

At VRTrader.com, we currently have a price target range of $58-63 for Sturm Ruger for our Platinum clients. 

While there are some out there that are talking down the growth potential of these two stocks, we feel that personal protection is a business that has plenty of upside left.

Columnist Conversations

Market posts the third day of solid gains in a row. Will see if we can make it four a row before the long hol...
With the averages now flying upwards, with everyone scrambling to buy, it is startling to remember how palpabl...
Inability of Bank of America (BAC) to claw its way above 16.30-.40 resistance will increase the likelihood tha...
The Fed works for the government. The Federal government owes over $16 trillion. The Fed will likley never rai...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.