Bill Wexler's Profits of DOOM Message Board

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Strategies & Market Trends : Bill Wexler's Profits of DOOM

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To: Druss who wrote (846)	5/14/1998 12:40:00 AM
From: Bill Wexler	Read Replies (1) of 4634

Another interesting short idea - Sturm Ruger (NYSE:RGR) Ruger is a gun manufacturer. Over the past few years, its gun business has been slowly eroding and the company has derived a greater percentage of its revenue from its titanium casting business. It's main product is the titanium golf club head for Callaway "Big Bertha" clubs. Judging from Callaway's recent collapse (the golf business has gone to hell in Asia), I would guess that orders for the club heads have slowed down and inventories are piling up. I also think that the downtrend in gun sales will continue. Last Q, RGR missed earnings by 12%. I figure they're going to disappoint when they report in June. The risk here is the relatively hefty dividend payout (about 4%). However, I still think that the stock will drift down to the mid-teens - if not lower. Nearly zero risk of an upside surprise and volatility is very low.

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