Why Smith & Wesson Holding Corp.'s Shares Popped 11.5% in June

By Markets Fool.com

Image source: Getty Images.

Continue Reading Below

What: Shares of gunmaker Smith & Wesson Holding Corp. jumped 11.5% in June, according to data provided by S&P Global Market Intelligence, as earnings easily surpassed expectations.

So what: Sales jumped 22% in the quarter, to $221.1 million, and net income jumped 62.6%, to $35.6 million. On an adjusted per share basis, earnings jumped to $0.66, which easily surpassed the $0.54 analysts expected.

Smith & Wesson has been able to leverage its manufacturing base and increase gross margin from 37.1% to 41.6% over the past year. This sets the company up for solid profitability going forward.

Now what: The surge in gun sales continues as consumers fear future regulation, and politicians and violence fuel those flames. That's the fact of life in the gun industry, and the dynamic has certainly been good for business for Smith & Wesson. With a trailing price-to-earnings ratio of just 16.5 and growth well into double digits, the stock looks like a decent value as well. Barring any big jolts to business, the future is bright in the gun industry.

The article Why Smith & Wesson Holding Corp.'s Shares Popped 11.5% in June originally appeared on Fool.com.

Continue Reading Below

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks 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 Motley Fool has a disclosure policy.