Smith & Wesson Brands, Inc. (NASDAQ:SWBI) Sees Notable Surge in Short Interest

Smith & Wesson Brands, Inc. (NASDAQ:SWBI) experienced a substantial rise in short interest during December. By December 15th, short interest reached 2,200,000 shares, reflecting a 33.3% increase from the November 30th figure of 1,650,000 shares. With an average daily trading volume of 589,200 shares, the current days-to-cover ratio stands at 3.7 days. This means that approximately 5.1% of the company's shares are currently sold short.

Stock Ratings Update

Recent evaluations from several brokerages have influenced views on SWBI. On December 6th, Craig Hallum downgraded Smith & Wesson Brands from a "buy" to a "hold" rating and lowered their price target from $18.00 to $13.00. Similarly, Lake Street Capital also shifted its recommendation from a "buy" to a "hold" and adjusted their price target in line with Craig Hallum's.

Institutional Investment Trends

Hedge funds and institutional investors are actively managing their stakes in Smith & Wesson Brands. Notably, Rhumbline Advisers increased its holding by 0.8% during the second quarter, now owning 79,360 shares valued at approximately $1,138,000 after adding 655 shares. Cetera Investment Advisers also raised its position by 1.8% during the same period, acquiring an additional 1,421 shares to reach a total of 80,650 shares worth $1,157,000. Franklin Resources Inc. similarly expanded its holdings by 5.8% in the third quarter, now holding 29,249 shares valued around $378,000. Additionally, Quarry LP made a significant increase, raising its stake by 2,773.0% during the second quarter, and now owns 2,126 shares valued at $30,000. Overall, hedge funds and institutional investors own 59.33% of the company's stock.

Recent Stock Performance

On the trading day that follows, Smith & Wesson's stock declined by 0.9%, closing at $9.94. Around 428,260 shares were traded, compared to the average volume of 453,017 shares. The market capitalization of the company is approximately $437.39 million, with a price-to-earnings ratio of 12.74. Over the last 50 days, the simple moving average has been $12.45, while the 200-day average is $13.70. The stock has seen a twelve-month low of $9.78 and a peak of $18.05. Key financial ratios include a debt-to-equity ratio of 0.36 and current ratios of 1.43 and 3.97.

Q3 Earnings Report

On December 5th, Smith & Wesson Brands announced its quarterly earnings, reporting $0.11 earnings per share, which was lower than analysts' expectations of $0.17 per share. Despite this, the company recorded a return on equity of 8.78% and a net margin of 7.00%. The revenue for the quarter totaled $129.70 million, falling short of expectations of $133.53 million. This represented a year-over-year revenue increase of 3.8%, compared to the same quarter last year, where the EPS was $0.14. Analysts predict an annual EPS of approximately $0.47 for the ongoing fiscal year.

Dividend Declaration

The company has also announced a quarterly dividend, which will be disbursed on January 2nd. Shareholders of record on December 19th will receive a dividend of $0.13 per share, translating to an annualized dividend of $0.52 and a dividend yield of 5.23%. The payout ratio stands at 66.67%.

About Smith & Wesson Brands

Smith & Wesson Brands, Inc. focuses on the design, manufacture, and sale of firearms globally. Their product lineup includes handguns, like revolvers and pistols, as well as long guns including modern sporting rifles and bolt-action rifles, along with firearm-related products under well-known brands such as Smith & Wesson, M&P, and Gemtech.

Final Thoughts

This news serves as important information for current and prospective investors regarding Smith & Wesson Brands. It's crucial to stay updated on stock performance, institutional interest, and overall market trends.

Smith, Wesson, Stock