5-Star Stocks Poised to Pop: Sturm Ruger
Dec 23rd 2011 11:04AM
Updated Dec 23rd 2011 3:04PM
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, firearm specialist Sturm, Ruger & Company (NYS: RGR) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Sturm Ruger's business and see what CAPS investors are saying about the stock right now.
Sturm Ruger facts
|Headquarters (Founded)||Southport, Conn. (1948)|
|Market Cap||$637 million|
|Trailing-12-Month Revenue||$300 million|
|Management||CEO Michael Fifer (since 2006)
CFO Thomas Dineen (since 2003)
|Return on Equity (Average, Past 3 Years)||30.6%|
|Cash/Debt||$79.3 million / $0|
|Competitors||Smith & Wesson (NAS: SWHC)|
Sources: S&P Capital IQ and Motley Fool CAPS.
Just last week, aquapong52 tapped Sturm Ruger as a particularly timely opportunity: "Strong demand for their products and will likely get even stronger as the election nears. If it looks like President Obama will be reelected, look for demand to skyrocket on fears of crackdown attempts on the industry."
Sturm Ruger even boasts a solid three-year average operating margin of 17%. That's higher than that of main rival Smith & Wesson (7%), as well as other firearm plays like Olin (NYS: OLN) (10%) and Alliant Techsystems (NYS: ATK) (11%).
CAPS member eksummers620 elaborates on the Sturm Ruger bull case:
I totally disagree with guns but that isn't my job. As an investor I think that society has taken the stance the gun ownership is socially acceptable. Taking my emotion out of the equation, gun sales hit record levels on Black Friday. 25% of the buyers are reported to be first time gun owners. Combine that with the fact that firearm safety classes are full if not overflowing, we have ourselves a trend here.
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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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