In his first Executive Decision segment of Thursday's "Mad Money" program, host Jim Cramer spoke with Chris Metz, CEO of Vista Outdoor Inc. (VSTO) , makers of outdoor equipment for shooting, biking, golf, cooking and more.
Metz said Vista simply cannot meet the equipment demand for outdoor activities, including biking and golf. He said Americans are ready to get back outdoors and the activities in which Vista is involved are a lot more affordable than boats or RVs.
Innovation has been driving Vista's growth, but Metz said mergers and acquisitions remain a key component of its strategy. Vista has completed four acquisitions in just the past six months and Metz said the company has not developed the full power of its brand portfolio.
Let's see if there is any power in the charts.
In this daily bar chart of VSTO, below, we can see that prices have tripled in the past 12 months. Corrections or consolidations have been sideways affairs. Prices are now trading above the rising 50-day moving average line and above the rising 200-day line. Trading volume looks like it has diminished since December, but the On-Balance-Volume (OBV) line shows a rising trend the past year and confirms the advance. The trend-following Moving Average Convergence Divergence (MACD) oscillator is above the zero line and poised to cross to the upside for a new outright go long signal.
In this weekly Japanese candlestick chart of VSTO, below, we can see a bullish picture. Prices made a saucer bottom back in 2019 and are still in a strong and durable uptrend above the rising 40-week moving average line. Notice the large lower shadow on a recent candle, telling us that traders are rejecting the lows. The weekly OBV line has been strong for nearly two years. The MACD oscillator is in a bullish alignment above the zero line.
In this daily Point and Figure chart of VSTO, below, we can see the recent new high for the move up. A price target in the $55 area is projected.
In this weekly Point and Figure chart of VSTO, below, we used close-only price data and a traditional even-dollar scaling. The software is not showing us a higher price target than what the daily chart shows but a trade at $53 will be a significant upside breakout.
Bottom line strategy: I enjoy the shooting sports so I am surprised I have not heard of this company. I guess I need to get out more. The charts of VSTO are bullish and even if you are a couch potato you could trade this stock from the long side, risking to $36 for now. The mid-$50s is our first upside price target.