SMITH & WESSON HOLDING CORPORATION
Smith & Wesson Holding Corporation
Bobbi Sweeney
BUSI 530 B02
Dr. William Ragle
May 11, 2014
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SMITH & WESSON HOLDING CORPORATION
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Smith & Wesson Holding Corporation
Overview
Smith & Wesson Holding Corporation was founded in 1952, in Springfield,
Massachusetts, and is well known for the sales of firearms, rifles, handcuffs, and restraints.
Smith & Wesson Holding Corporation sells under Smith & Wesson, M&P, and Thompson Arms.
Smith & Wesson also has online retail stores to sell accessories, apparel, shooting supplies, and
branded products. Smith & Wesson Holding Corporation has 8 subsidiary companies that they
have control and interest invested. The future outlook for sub-industry products is positive. The
estimation is based on declining unemployment rates, low gasoline prices, low inflation rates,
and aging of the baby boomers (Standard & Poor’s Net Advantage, 2014).
Economic Analysis
The first 3 Quarters of 2014 show an average of 1116.6% increase in revenues compared
to 2013. If this figure stays constant for the 4th Quarter, then the end of year revenue can be
estimated at approximately $655.7 million; the end of 2013, revenue total was $587.5 million.
Earnings per share also increased an average of 133.1% the first 3 Quarters of 2014 compared to
2013; however, earning per share dropped 70% from 1st to 2nd Quarters in 2014. The dividend
rate per share is zero (Standard & Poor’s Net Advantage, 2014). Per NASDAQ on May 9, 2014,
Smith & Wesson Holding Corporation was selling at $15.56 per share, which was an 8 cent
increase (NASDAQ, 2014).
Smith & Wesson Holding Corporation’s competition includes Springfield Armory, Sig
Sauer, and Fabrique Nationale, who is the parent company of Winchester, Browning Arms, and
Repeating Arms; these companies are privately owned and no stock market information was
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available. A major potential impact is the discussion of stricter gun laws. If stricter gun laws do
pass, sales for any manufacturer will decline in the public market. Currently, only 49% of people
surveyed by The Huffington Post were in favor of stricter gun laws (unknown, 2014).
Conclusion
Smith & Wesson Holding Corporation shows positive revenue and earnings per share in
2014 than the past few years. While these stats would appear to be a reason to invest, the
dividend return is zero. The recommendation would not to invest in Smith & Wesson Holding
Corporation.
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References
Standard & Poor’s Net Advantage. (2014). Smith & Wesson Holding Corporation. Retrieved on
May 11, 2014, from
http://www.netadvantage.standardandpoors.com.ezproxy.liberty.edu:2048/NASApp/NetA
dvantage/cp/companyOverView.do
NASDAQ. (2014). Smith & Wesson Holding Corporation. Retrieved on May 11, 2014, from
http://www.nasdaq.com/symbol/swhc/stock-report
Unknown. (2014). Half of American Support Stricter Gun Laws, But Many Question Their
Effectiveness. The Huffington Post. Retrieved on May 11, 2014, from
http://www.huffingtonpost.com/2014/04/17/gun-control-poll_n_5161905.html
