Smith & Wesson Holding Corporation (SWHC)

Smith & Wesson Holding Corporation (SWHC)

Michael Vargas

Business Summary Largest US firearms manufacturer and

exporter Provides products and services for safety,

security, protection, and sports in the US and internationally

Products include• Firearms• Handguns• Sporting Rifles• Firearm-related products and accessories

Founded in 1852 in Springfield, MO

Market S&W sells its products through

commercial, law enforcement, federal, and military distributors, retailers and dealers in US to:• Gun enthusiasts / Collectors• Hunters / Sportsmen• Law Enforcement / Military / Security

Services• Individuals for personal and home

protection

….Bottom Line It’s a fucking gun company.

Stock Overview

Stock Performance Last 6 months, SWHC has increased

+42.1% SWHC has outperformed the S&P 500

Total Return Index benchmark by 38.7%

SWHC witnessed a 600% rise in Q1 earnings, from 4 cents to 28 cents this yr

Sales rose by 48% to $136m Company forecasts sales at $130-

135m, well above the Street’s $115m est

Stock Overview

Gun Sales Increasing Cabela’s saw a 25% increase in new gun

buyers right after the 2008 election. Nearly 12m background checks for gun

sales through Aug. 31, up 56% from 2008. Federal excise taxes on the sale of new

firearms and ammo rose $453m in 2009, up 45% from the year before.

Ammo manufacturers have backlogs.

Source: WSJ

Gun Sales Increasing

Source: WSJ

Why buy? Diversification

• No aerospace/defense products & services holdings

Superb performance• Sales and earnings

Election hedge• “Gun control is coming” argument

Risk Short-term play Tighter gun control laws Defense spending cuts Supply Low consumer recreational spending

Questions?