Friday, March 23, 2012

Ruger firearms suspends taking new orders

By Donald Sensing

Ruger GP100-4 revolver
Sturm-Ruger, maker of the famous Ruger-brand revolvers and semiauto pistols, has announced it is suspending taking new orders, probably until near the end of May. Why? It can't keep up with business!
Shares of Sturm, Ruger & Co. and Smith & Wesson Holding Corp. soared Thursday, a day after Sturm Ruger said it received orders for more than a million firearms in the first quarter of this year.

THE SPARK: The Southport, Conn.-based company said it received so many orders that it was temporarily suspending acceptance of new ones.

It credited the jump to company programs in January and February with boosting retailer and distributor demand for Ruger firearms.

THE BIG PICTURE: Sturm, Ruger & Co. makes firearms for the commercial sporting market. Its products include rifles, revolvers and pistols.

The company said that despite attempts to increase production, the rate of incoming orders has exceeded its capacity to fill them on a timely basis. So it was forced to put new orders on hold. It expects to resume accepting orders by the end of May.
Ruger has been one of best-performing stocks of the past year. In February 2010 it traded at well under 16. Two days ago, Ruger announced its record orders. On that news, RGR jumped from Wednesday's close of 42.30 to close at 47.93. Back when it sold in the high 20s, I recall reading an investment column saying it would hit 50 per share this year. It looks like it will hit that price long before then.(Disclosure: I do not own any shares of the company.)

Today the stock's price has retreated somewhat, doubtless because of the company's announcement it is not taking new orders for five weeks or so. But it hasn't retreated much.

And it's worth pointing out at this time that the company has benefited from having the country's best firearms salesman working on its behalf.

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