What Hedge Funds Think of Firearms Stocks

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#2. Smith & Wesson Holding Corp (NASDAQ:SWHC)

– Investors with long positions as of March 31: 24

– Aggregate value of investors’ holdings as of March 31: $121.78 Million

Smith & Wesson Holding Corp (NASDAQ:SWHC) has somewhat fell out of favor with the hedge fund managers monitored by our team, as the number of managers with stakes in the U.S. manufacturer of firearms dropped to 24 from 27 quarter-on-quarter. Meanwhile, the dollar value of those stakes declined by 12% quarter-on-quarter to $121.78 million even if the company’s shares gained a whopping 21% during the first quarter. Roughly 8% of the company’s outstanding common stock were hoarded up by the 24 hedge funds followed by our team. Although the U.S. president, Barack Obama, has been a strong proponent of more gun controls, demand for the gun maker’s products does not show signs of weakness. Smith & Wesson posted net sales of $210.8 million for the three months that ended January 31, up an impressive $80.2 million relative to the same period of the previous year. The gun maker’s shares are down 2% year-to-date. Columbus Circle Investors, managed by Clifford G. Fox, owned 474,369 shares of Smith & Wesson Holding Corp (NASDAQ:SWHC) at the end of March.

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#1. Dicks Sporting Goods Inc. (NYSE:DKS)

– Investors with long positions as of March 31: 35

– Aggregate value of investors’ holdings as of March 31: $508.62 Million

Dicks Sporting Goods Inc. (NYSE:DKS) was a hedge fund darling during the first three months of 2016, as the number funds from our system with equity investments in the company spiked to 35 from 26 quarter-on-quarter. Similarly, the aggregate value of those equity investments rose by 49% quarter-over-quarter to $508.62 million, partially owing to a nearly 33% price appreciation of the company’ shares during the March quarter. The 35 hedge fund vehicles invested in Dicks Sporting Goods stockpiled almost one-tenth of the company’s outstanding shares. The shares of the omni-channel sporting goods retailer, which also sells guns and ammo, are up 20% thus far in 2016. Just recently, Dick’s Sporting Goods said the massive liquidation sale kicked off by retailer of sporting goods Sports Authority, which filed for Chapter 11 bankruptcy in March, will most likely impact its performance in the foreseeable future. As a result, Dick’s Sporting Goods downwardly revised its guidance due to a possible glut of cheap sporting equipment. Ken Griffin’s Citadel Advisors LLC acquired a new stake of 2.14 million shares of Dicks Sporting Goods Inc. (NYSE:DKS) during the March quarter.

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Disclosure: None

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