For his final "Executive Decision" segment, Jim Cramer checked in Chris Metz, CEO of Vista Outdoor (VSTO) , the shooting sports and outdoor products' maker.
Metz said Vista is seeing strong demand across all of its business, with 35% growth even during the pandemic.
When asked where the increased demand is coming from, Metz noted that as people were forced to stay indoors, the desire to get outdoors and become self-sufficient grew, which led to strong growth in hunting and shooting sports.
Shares of Vista still trade for just six to seven times earnings, but Metz said the markets should soon realize the value the company provides.
Let's check out the charts but I am partial towards the shooting sports.
Sixty years ago during my "Wonder Bread" years I attended a military academy. Yes, think J.D. Salinger and "Catcher in the Rye." That's the one. I learned to shoot a rifle and still very much enjoy the sport - slow fire pistol, sporting clays and all-day high-powered rifle competitions.
In the daily bar chart of VSTO, below, we can see that the shares have made a nice rally from their May nadir. The shares are up four-fold. The 50-day moving average line is cresting but the slope of the 200-day moving average line remains positive.
The trading volume shows increases on most of the rallies. The On-Balance-Volume (OBV) line shows a positive trend from May. The Moving Average Convergence Divergence (MACD) oscillator is down at the zero line.
In the weekly bar chart of VSTO, below, we went back our usual three years and here we can see a nice saucer bottom pattern. Prices and trading volume have strengthened from February onwards -- the right half of the saucer pattern. The 40-week moving average line is positive.
The OBV line is bullish but the MACD oscillator has narrowed and could cross to a take profits sell signal.
In this second weekly bar chart of VSTO, below, we went back five years to show the entire base pattern from 2017 -- $25 seems to be the breakout level.
Notice the saucer shape to the trading volume? (This is detailed in my book "Chart Patterns.")
In this daily Point and Figure chart of VSTO, below, we can see a potential upside price target in the $35 area.
In this weekly Point and Figure chart of VSTO, below, we can see a tentative long-term price target of $76.
Bottom-line strategy: While gun ownership may be even less popular than politics at a cocktail party these days, I enjoy the shooting sports and I find the charts of VSTO to be bullish. Aggressive traders could go long VSTO at current levels risking a close below $26 for now.
