(01-19-2021, 07:55 PM)NilesMike Wrote: That is some rich premium from a "cheap" stock with low IV.I track them fairly close and can give you my thesis FWIW. I would not call myself a gun nut, but retired military and my family target shoots. Obviously we have political uncertainty for the foreseeable future. "Gun huggers" start hoarding EVERYTIME they get worried. Very cyclical charts that align with regime changes, social unrest, school shootings, and the subsequent rhetoric from politicians. It's just panic buying. It will happen but you might wait a year or two if you have a bad entry. Around JUL I became convinced that Biden had a chance, and at the very least an election close enough to drive fear. Anyway I started tracking/trading Ruger (RGR), Smith and Wesson (SWBI), and Vista Outdoors (VSTO).
What's interesting is, I pulled up VSTO chart and laid the "abovethegreenline" parameters on it and WOW, one could have sold calls in downtrend and puts in an uptrend w/o an assignment for 5 years.
Was an eye opener for me, will continue to explore.
The pure gun stocks have flown high of course. I cashed out and the risk/reward isn't as good from here IMO. They are however conservatively run and both RGR and SWBI may be totally debt free this year. That's not a bad place to be and I will watch for a had dip. (and sell CCs if I get shares). It will come eventually. Ruger still has a four month wait list to get a common pistol. I know that because I tried to order one for a Christmas present.
VSTO may run with the gun stocks but I see a level of security for the following reasons. They sell ammo which is frequently out of stock for popular calibers. When gun enthusiasts get scared they empty the shelves. When it gets too cheap they buy some more because they it will spike again when the mean DEMs come after my guns right? Ammo hoarding is a obsession but we never know when the zombie apocalypse is coming.
VSTO just picked up Remington ammo when the brand went BK. They now own a large % of the major brands at all price points. They also own the best brand accessories like optics and cool Hollywood looking stuff. They own some better brands in camping cookstoves and other outdoor sports. What they don't have is a high exposure to stuff that could get restricted by the GOV. Don't forget we have a 6-3 SCOTUS. I am not a bit afraid anything real happens and not afraid to own VSTO for years if necessary. They will no doubt get hit when gun stocks do. The company is still fairly valued and I will be highly surprised if they don't blow away earnings for at least a few more quarters, if not years. I will watch their debt and hope they pick up some more yard sale pricing on quality brands. I hate to make price targets but mine has been 33-35 for 2021 since they were trading at half that. Seven analysts follow them and none of them are unconvinced. I am really hoping some political chatter will scare the SP down before spring earnings.