Posted on 10/22/2009 1:14:34 PM PDT by 2ndDivisionVet
After a big flop with Chrysler, Cerberus finally has a winner on its hands. Even better, right-wing gun nuts have another shot at profits. I can’t wait.
Baltimore – I live in a neighborhood where guns are common. I like it that way.
Last night, the lady of the house and I decided to enjoy what may be one of the last warm evenings of the year on the East Coast by taking a short hike along the river that flows just two miles from our front door.
While meandering along the water and dodging groundhog holes, we heard the telltale report of high-powered rifle. I turned toward the sound of the shot fully expecting to see a hunter aiming for a follow-up shot.
Instead, I saw a family (at least three generations worth) sitting around a shooting bench, sighting in the new rifle. Best of all, there was only one man present. The shooter was a young girl and her grandma held the extra shells as gently and firmly as fine china.
Why in the world am I sharing this mundane story of rural living? Good question.
It’s to prove that while the city slickers and flatlanders down in D.C. may not be fans of the firearm industry, those of us that manage to somehow squeak out a life that resembles that classic American way still love the sheen of a well-polished hardwood stock and a freshly blued barrel.
The smell of gunpowder
In fact, the gun industry is wrong to fear Obama’s presidency. Since McCain conceded to the man almost a year ago, gun sales have been through the roof.
Right now, investors that want to cash in on the gun-buying craze have just two choices (outside unloading their personal arsenal), Smith & Wesson (NASDAQ:SWHC) and Sturm Ruger (NYSE:RGR).
Shareholders in both companies managed to find full immunity from the current economic downspin. Shares of Smith & Wesson are up nearly 200% from this time last year (400% peak to trough) and Sturm Ruger’s share price has surged 89% (250% from the bottom to the top).
Now we are about to get a third choice and I could not be more excited.
As a proud new owner of a Remington 887 Nitro Mag that missed its first shot last week (my fault, not the gun’s), I am happy to hear the beleaguered private-equity firm Cerberus is about to take the company public.
Remington is just one part of Cerberus’ Freedom Group, an umbrella that contains big brands like Marlin (I traded a Marlin lever action for my 887), Remington, Bushmaster, Parker and Nesika.
All combined, Freedom sold 1.1 million shotguns and rifles and two billion rounds of ammunition during its fiscal 2009. The sales added up to $427.3 million, equating to profits of $32.8 million.
In 2008, Ruger recorded $181 million in sales and $8.7 million in profits while Smith & Wesson booked a top-line of $102 million and income of $12.6 million.
Obviously, Freedom is going to give investors a strong choice.
Cerberus, which currently owns 94 % of the company is looking to get $200 million during the upcoming IPO. Since this news is fresh, we have few details on the exact proportions or the date of the offering, but rest assured this is going to be a hot one.
You will be hearing more.
Investors have been waiting to get their hands on these names for quite some time. After a mega-flop with Chrysler, Cerberus has a strong winner on its hands this time.
Shoot!
Lock and load fellow nutjobs.
I’ll be watching for the IPO on this one. Have to see what nickels and dimes I have and how much I can get.
Why in the world would they give us a reason to go nuts!
Is there a date for the IPO yet?
Great financial opportunity.
The fact that it totally irritates the dim-bulb-idiots is like a fine chocolate cake laced with whipped cream.
Ah, I love the sound of liberals roasting in their own fires.
Hey Obama, bite me.
Re: “Lock and load fellow nutjobs.”
**************
Absolutely! First thing after election I purchased a firearm — best move I ever made — I’m proud to be part of the huge increase in gun sales — thanks to Obama — “gun salesman of the year!”
That’s good news for sure.
As for normal investors like myself my rule is this on IPOs.
If I can get in on it, I don’t want it! I’m not a wallstreet insider or multi millionaire which is where the real IPO money is made. YMMV of course.
I’m a fan of guns. I like guns. I like seeing people own guns.
I love my Guns more than I can stand the resident
AFAIK, Cerebus owns a rather wide variety of companies, so investing therein to benefit from the gun boom is tempered by their other not-so-vibrant holdings (see repeated references to Chrysler).
“Hey Obama, bite me.”
Hey! Watch it!
or some baggage handler may misconstrue that as a threat and call the Secret Service. They go to your house and find 43 legal guns. I’ve heard of that happening.
lol
Bad idea, you’re buying at the top of the market.
Make money ping
It would be described as an unnecessary and menacing arsenal and a hoard of ammunition with a potential hazard to the neighborhood..."officials are still checking to see how many are illegal. Angry resident Griswold3 will be kept in custody until he is cleared of any wrong doing."
...My cold dead fingers!
Beautiful stories like these make me all warm and fuzzy.
The Top Ten Reasons Men Prefer Guns Over Women
#10. You can trade an old 44 for a new 22.
#9. You can keep one gun at home and have another for when you’re on the road.
#8. If you admire a friend’s gun and tell him so, he will probably let you try it out a few times.
#7. Your primary gun doesn’t mind if you keep another gun for a backup.
#6. Your gun will stay with you even if you run out of ammo.
#5. A gun doesn’t take up a lot of closet space.
#4. Guns function normally every day of the month.
#3. A gun doesn’t ask , “Do these new grips make me look fat?”
#2. A gun doesn’t mind if you go to sleep after you use it.
And the number one reason a gun is favored over a woman....
#1. YOU CAN BUY A SILENCER FOR A GUN
Remember, all of the little things count.
“AFAIK, Cerebus owns a rather wide variety of companies, so investing therein to benefit from the gun boom is tempered by their other not-so-vibrant holdings (see repeated references to Chrysler).”
Is this an ipo (and stock to the public) for all of Cerebus or just the firearms division?
(I am novice investor with a VERY small ira that needs to go to something with 10 year growth).
$ump
AFAIK, the IPO involves Cerebus taking advantage of it - not you.
bookmark
At what number would authorities consider ‘unnecessary and menacing arsenal and a hoard of ammunition with a potential hazard to the neighborhood’...
I have alot of groundhogs and coyotes, you know.
Here in Montana we have an open carry law even in the saloons. This would not sit well with Marshal Wyatt Earp
Everybody in my extended family knows their way around firearms. I guarantee that we're a tight bunch.
Bwhahhah!
I'm sure you have your wife's permission to post that.
thanks, I understand that ipo’s are not for individual (small) investors - but eventually the stock will by publicly traded?
Thus my question, will the stock be representing the entire cerebus family (including chrysler, etc) or just the firearms and ammo divisions?
Expect it to always be less than what you have.
I have her permission to say that I wear the pantaloons in the dice family!
Q: Why did they name PMS, PMS?
A: Because "mad cow" was already taken!
I’m not buying. The opportunity has likely passed.
Probably a good time for Cereberus to sell, though.
“I regret that I have only ONE finger to give my government!”
Does anyone care to venture a guess to which finger it is???
Outfits like Cerberus like to bring companies public near the top of a market. Given the sad shape the U.S. economy is in, and the likelihood of further downlegs in this massively contractionary secular bear, going out years into the future, it would be a reasonable bet that Cerberus (along with numerous industry "insiders" across the business spectrum, who are selling award shares at a very fast clip) wants to cash their chips and get out while the getting's good.
Things don't look good for either the U.S. market or the U.S. dollar. It's probably a top-down, macroeconomically-driven decision to unload a Stateside asset.
Hey, why do I have to choose? lol
As a general proposition, the bear-market bottom will precede the end of the secular bear by several years.
It will be safe to invest for the long term, on the example of the 70's, once the spike low (blowoff low) is recognized. Walls bleed, dogs howl, guys walk out 14th-floor windows, Newsweek and Business Week break black-cover editions announcing the death of equities, that kind of thing.
(Okay, so I borrowed a Kelsey Grammer line from Frazier about the dogs and walls.)
But until you get to the low, sentiment is a misleading indicator, since "sentiment" tends to point in the right direction for a long time during the downleg(s) of a secular bear, trading off into the blowoff low (thus James Stack, in a 1990's study he did of prior bears).
According to Jerry Favors and Investors' Intelligence, both of which replicated the late Edson Gould's benchmark work on forecasting the 70's bear market's low, duration, and timing in months of the blowoff low and then applied Gould's work to the post-2000 bear, we should have encountered the blowoff in 2006, but Fed interference through the Plunge Protection Team (more formally called The President's Working Group on Financial Markets, formed secretly after the 1987 Crash, whose activities have been referred to in the press as "the Greenspan Put") has distorted and prolonged market cycles in the 00's so that it's hard to say where we are.
Minyanville.com and FinancialSense.com writers think we've another big downleg to go that will be precipitated by "unknown unknowns" (borrowing from a pithily clueless recent federal document), what the Minyanville guys (who called the financial meltdown back in 2005) call a "W bottom". We saw one chevron of the "W" in March and are waiting for the next. Latest, best guess at timing that I've seen recently is that the Fed necromancy rally will continue until "about" Christmas, then Katy bar the door.
Suggest you read these sites and look for other good market readers with great track records like Richard Bernstein (formerly of Merrill Lynch), Sam and Bob Stovall, Mary Ann and Pamela Aden (on gold), Richard Russell, Harry Schultz, and Mark Liebovit. Also Kevin DePew, Mish Shedlock, and Todd Harrison of Minyanville.com and Tim Wood, Brian Pretti, and Jim Puplava at FinancialSense.com.
Hope this helps. Lord knows I need all the help I can get!
Thank you!
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