Sturm, Ruger & Co. (RGR) just reported another great quarter, pushing shares back above $32 and within striking distance of the 52-week high. With a high industry rank and a bullish growth projection, this Zacks #1 Rank stock is a sure-fire pick for momentum.
Company Description
Sturm, Ruger & Co., Inc. designs, manufactures and sells firearms in the United States. The company was founded in 1948 and has a market cap of $606 million.
RGR saw big gains in October as the market recovered from a tough September. The movement came ahead of strong results from early November that came in well ahead of expectations.
Third-Quarter Results
Revenue for the period was up 37% from last year to $81 million. Earnings also came in strong at 56 cents, 40% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 22% over the last four quarters.
The good quarter was driven by new product sales, coming in at $26 million, comprising 33% of total revenue.
Strum Ruger was also busy returning value to its shareholders, buying back 133,400 shares during the quarter at a cost of $2 million. The company has $8 million remaining under authorization for additional stock purchases.
Financial Profile
Sturm Ruger has used its recent earnings momentum to strengthen its financial profile, with cash and short-term investments up 49% from last year to $79 million against no long-term debt.
Estimates
We haven’t seen any movement in estimates off the good quarter, but as it stands the current-year estimate is projecting 18% growth while the next-year estimate is calling for 15% growth.
With a PEG ratio of 1.27, RGR trades at a premium to the benchmark of 1 for value.
6-Month Chart
On the chart, RGR rallied hard in October, getting an extra boost from the good quarter. Look for support from the long-term trend on any weakness. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.
