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Guns and gold tell the story on the economy

When gold miners and gun-toters lag the broader economy, it's usually a good sign that conditions are on the mend. Both sectors outperform when times were tough, but this year, their growth has slowed relative to the market has a whole.

The S&P 500 index has gained 57% since March 9, 2009, according to a USA Today report, while Barrick Gold (NYSE: ABX) and Newmont Mining (NYSE: NEM) are up 36% and 21%, respectively, for the same period. Smith & Wesson (NASDAQ: SWHC) is up 30%. Again, these are definitely respectable results, but they aren't keeping pace with the index.

Continue reading Guns and gold tell the story on the economy

Earnings highlights: Best Buy, FedEx, Campbell, National Semiconductor, Talbots ...

Here are some highlights from last week's earnings coverage from BloggingStocks:

Continue reading Earnings highlights: Best Buy, FedEx, Campbell, National Semiconductor, Talbots ...

The week in preview: End-of-quarter earnings expectations: Nike, Oracle, Walgreen ...

This week brings a small flurry of end-of-the-calendar-quarter earnings reports. And for the most part, the expectations of the analysts surveyed by Thomson Reuters aren't very high. Companies expected to report declining earnings in the most recently concluded quarter include America's Car-Mart Inc. (NASDAQ: CRMT), Bed Bath & Beyond Inc. (NASDAQ: BBBY), ConAgra Foods Inc. (NYSE: CAG), Jabil Circuit Inc. (NYSE: JBL), Jackson Hewitt Tax Service Inc. (NYSE: JTX), Monsanto Co. (NYSE: MON), and Sonic Corp. (NASDAQ: SONC).

Continue reading The week in preview: End-of-quarter earnings expectations: Nike, Oracle, Walgreen ...

Earnings highlights: FedEx, Best Buy, RIM, Adobe, Smucker, Discover and more

Here are some highlights from this past week's earnings coverage from BloggingStocks:

Continue reading Earnings highlights: FedEx, Best Buy, RIM, Adobe, Smucker, Discover and more

Earnings highlights: Lehman, UBS, Krispy Kreme, Pepsico, Pep Boys and others

Here are some highlights from this past week's earnings coverage from BloggingStocks:

Continue reading Earnings highlights: Lehman, UBS, Krispy Kreme, Pepsico, Pep Boys and others

Benihana, Smith & Wesson report lower Q4 earnings

Both Japanese restaurant chain Benihana Inc. (NASDAQ: BNHN) and gun maker Smith & Wesson Holding Corp. (NASDAQ: SWHC) on Thursday said that their profits fell in their fiscal fourth-quarters. Shares of the former fell Friday by more than 11%, while shares of the latter rose nearly 6%.

Miami-based Benihana's fourth-quarter net income fell 30% from the year-ago quarter to $2.7 million, or 17 cents per share percent, due to the difficult environment for restaurants. Revenue for the quarter ended March 30 fell 2% to $70.2 million, and same-store sales fell 2.2%.

Analysts polled by Thomson Financial had expected a profit of 15 cents per share on revenue of $70.8 million.

For the fiscal year, earnings fell 13% to $11.7 million, or 75 cents per share, and revenue rose 9% to $296.9 million.

Shares of Benihana fell to a 52-week low of $6.69 on Friday before closing at $6.97. Shares are down 44.7% year to date.

Continue reading Benihana, Smith & Wesson report lower Q4 earnings

Smith & Wesson (SWHC) slashes forecast again

SWHC logoSmith & Wesson Holding Corp. (NASDAQ: SWHC) stock is falling this morning after the company cut its outlook for the second time since late October, forecasting this morning a profit of 40 cents per share for the year ending April 30. The company had previously estimated 63 cents per share in profit. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on SWHC.

After hitting a one-year high of $22.80 in August, the stock hit a one-year low of $9.51 yesterday, but is well below that number today. This morning, SWHC opened at $7.02. So far today the stock has hit a low of $6.68 and a high of $7.25. As of 10:45, SWHC is trading at $7.14, down $2.78 (-27.9%). The chart for SWHC looks bearish and steady.

For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $10 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in 6 and a half months as long as SWHC is below $10 at June expiration. Smith & Wesson would have to rise by more than 40% before we would start to lose money.

SWHC has been above $10 as recently as yesterday, but has fallen sharply this morning and shown resistance around $10.10 over the past few weeks. This trade could be risky if the stock bounces back strongly, but with drops like today's and the one in October, investors will probably be cautious with this stock for the coming months.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in SWHC.

Symbol Lookup
IndexesChangePrice
DJIA+44.2910,291.26
NASDAQ+15.822,166.90
S&P 500+5.501,098.51

Last updated: November 11, 2009: 04:34 PM

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