I am a long-term buy-and-hold investor and I am willing to ride out any stock price storms if I believe a company is fundamentally strong. That being said, I still choose to routinely review my investments, especially when something drastic happens, to see if the fundamentals remain intact. Buy and hold is different than buy and forget.
When American Outdoor Brands Co. (NYSE: AOBC) gave fiscal year 2018 revenue guidance of $750-790 million during the last conference call, well below 2017's record of $903 million, I chose to dig deeper to see why it was so low. I understand the firearms industry is very cyclical and that it isn't realistic to expect a company in that industry to grow revenue impressively in a perfect upward trajectory every year. Warren Buffett is fond of saying that he would rather a lumpy 15% growth than a smooth 12%, and so would I. Nonetheless, and in light of heavy acquisition activity by AOBC of late, I believe that low of guidance points to more than cyclical or even political headwinds.
