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Sturm, Ruger & Co

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Sturm, Ruger & Co (RGR - Free Report) is having an awesome 2011, recently surging into a new all-time high after reporting an impressive Q2 earnings surprise of 33%. With an average earnings surprise of 17% over the last four quarters and estimates on the rise, this Zacks #1 Rank stock has its sight set on momentum.

Company Description

Sturm, Ruger & Co, Inc. engages in the design, manufacture and sale of firearms in the United States. the company was founded in 1948 and has a market cap of $519 million.

Although RGR has been trending higher for most of 2011, shares got an extra boost in late July after the company reported strong Q2 earnings that came in well ahead of expectations.

Second-Quarter Results

Revenue for the period was up 25% from last year to $80 million. Earnings also came in strong at 56 cents, 33% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 17% over the last four quarters.

The good quarter was driven by new products hitting the market, accounting for 34% of sales during the quarter. Channel sales were also strong, posting an impressive 24% gain from last year.

Financial Profile

The company's financial profile has also been on the upswing, with cash and short-term investments up $18 million from last year to $77 million against no long-term debt.

Share Repurchases

Sturm Ruger was also busy returning value to its shareholders during the quarter, repurchasing 133,000 shares for a total of $2 million.

Estimates

We saw some solid movement in estimates off the good quarter, with the current year adding 17 cents to $1.65 while the next-year estimate gained 14 cents to $1.81, a 10% growth projection.

Valuation

But in spite of the gains, the valuation picture still looks solid, with a forward P/E of 16.7X a discount to its peer average of 17.4X.

12-Month Chart

On the chart, shares jumped into a new all-time high on the good quarter. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.




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