Smith and Wesson stock is reaching heights never seen before in the history of the company. The stock price closed at $29.07 on Friday, just 30 cents shy of it’s all time high. However, that alone doesn’t tell the whole story.
Smith and Wesson stock has been tracing higher for the last five years. As you can see from the stock chart below, on Sept. 26, 2011, it traded at $2.52. If you would have bought then, you’d be looking at a 1,053 percent increase. Not bad for a five-year investment.
Chart courtesy of Morningstar.com
The bulk of the rise in the stock price has occurred since January of 2015. Since that time Smith and Wesson stock has risen from around $10 per share to what we see today. Again, not a bad return for a year and a half investment.
So what’s driving the stock price? Well, in the most basic of investment world terms, it’s company sales. Just a few weeks ago the company announced fourth quarter sales of $221.1 million. That figure was an increase of 22.2% over the fourth quarter of last year.
So the company is growing by selling more of its product. Those sales are leading to increased profits and a healthier company balance sheet. Investors are taking notice and more are purchasing the stock for their portfolios (hence the rise in Smith and Wesson stock price).
“But what’s driving sales?” you might be asking. Well, in case you don’t know Smith and Wesson manufactures and sells firearm products and accessories. That’s right…it’s a gun company.
As an investor, how does that headline make you feel? Does it encourage you in any way? Are you feeling good about your investment strategy and how its playing out in the market right now? Getting the urge to go sell a few stocks?
Some things fit perfectly together. Peanut butter and jelly. Batman and Robin. Yellow and blue. Separately they have value. When combined they create something extraordinary.
Why do we invest? Presumably, we all invest money to obtain the best returns we can to improve our financial future. Effectively, this means that we are investing to earn money.
We felt very nervous, opening our financial life – warts and all – to a complete stranger. Fortunately, our research found that most of the financial advisers in our area offered an initial consultation that didn’t require we make a long-term commitment to them. So with that encouraging news, we contacted four prospects and scheduled interviews.
It’s another typical early morning. With a busy day ahead, I’m getting a bit of writing done before the kids drag themselves out of bed and downstairs for breakfast. I’m clicking around the Internet and wiping the sleep from my eyes when I’m greeted with this headline from Yahoo Finance: