Today I will conclude Lyle's assignment of analyzing three companies. On December 14 an audit of Smith & Wesson Holding Co. (SWHC NASDAQ) was published followed by an investigation of Sturm Ruger & Co. Inc. (RGR NYSE) on December 16. The stock in focus today is Vista Outdoors Inc. (VSTO Inc.)
While the previous companies were essentially pure play gun manufacturers with some accessories, VSTO offers a broader range of outdoor products. In addition to sporting ammunition and firearms, the company also offers sports optics, golf rangefinders, archery accessories, blinds, decoys, and many more items.
The stock was spun out of Alliant Techsystems Inc. (ATK NYSE) in February of 2015 and ran to a 52-week high of $49.27 in August. A review of the charts will provide guidance as to direction, support, and resistance for VSTO.
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The one-year chart illustrates the initial jump in the stock price as investors began buying from the shareholders of ATK, who had received their portion of the spin out. VSTO has moved lower since it hit the August high and is now holding support near $42.00.
What is observable is that there is a downtrend in place and that a death cross formed in November. Also worth noting are the sell signals generated by the MACD and the RSI in August and again in November.
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The six-month chart highlights the downtrend that VSTO has been contending with since August and the resistance along the moving averages that has come into play over the last month.
At this point, there is scant evidence that we can expect a new leg up in the near term. The company will be presenting at the ICR Conference held January 11-13, 2016 where investors can expect an update on managements plans for the organization.
I will be taking a break returning on January 4, 2016. At that time I will re-examine the case for Enbridge Income Fund Holdings Inc. (ENF TSX) on assignment from Rick.
Make it the best Christmas ever and rock 2016 hard! Like you mean it!