Not Pulling The Trigger On Sturm, Ruger & Company

Philipp Brohl
359 Followers
(10min)

Summary

  • Finding value in cyclical industries like firearms requires buying at downturns. Sturm, Ruger & Company shows potential but isn't cheap enough yet.
  • RGR has consistent cash flow, no debt, and a strong balance sheet but faces legal and regulatory risks.
  • The gun industry is highly cyclical and influenced by politics and external events, making timing crucial even for long-term investment.
  • Despite RGR's strengths, I am waiting for a more favorable risk/reward ratio before making a meaningful investment.

Gewehr Ruger Kaliber 22

desertsolitaire/iStock via Getty Images

With markets near record highs, it gets more difficult to find reasonably priced shares that may provide satisfying long-term value. My quest for hunting for bargains has led me to what others refer to as sin stocks like

This article was written by

359 Followers
Philipp is a seasoned value investor with nearly 20 years of experience in the field. He takes a global approach to investment opportunities, seeking out undervalued companies that offer a significant margin of safety, leading to attractive dividend yields and returns. While he does not limit his investments to specific sectors or countries, he focuses only on companies he thoroughly understands and can reasonably assess for future growth potential. Philipp is particularly enthusiastic when he identifies a company with a solid earnings track record trading at less than 8x free cash flow, which inspired his username: 8xfreecash.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of RGR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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