I would like to present the case of Smith & Wesson (NASDAQ:SWHC) common stock as a great value investing opportunity in the price ranges in the low $20s (and below). The company is generating cash and growing on a stable basis.
The company produces and sells firearms, divided into handguns 67% and rifles 18%. It also provides accessories 9% and services 6% related to firearms. The products are sold to end users, both consumers and professionals. Consumers make up 80% of sales. No customer accounted for more than 10% of sales. However, commercial distributors that in turn sell to customers such as stores make up a more concentrated portion of which the two largest constitute 34% each. A loss of one or more of these distributors will not materially affect sales since remaining distributors will be allocated those sales. Intermediate sale channels have limited power to influence customers while they are in the store.
