Smith & Wesson is a manufacturer of firearms and related products thus is prone to cyclical trends. Earnings are expected to come down from $4.54 and $4.25 from 2021 and 2022 respectively, but higher than previous years of roughly $1 at which time it traded at a range of $5 and $18 giving it a normalized cycle pe of roughly 10. Going forward with inflation in mind but also renewed focus on guns SWBI is expected to have mid cycle earnings of around $2 which should give it a fair value of $20 and a trading range of $10 and $30. Trading at around $14 today 08/24/22 this represents a discount of roughly 50% that investors can take advantage of.

Turning the page to the technical side SWBI has support at the 50 day moving average of roughly around $14, then $13.5 where some serious volume has been done recently. The way I would play it is by getting a half position at current prices then add at around $13.5. If it moves higher instead I would take profits around $16 and look for a better entry again if opportunity presents itself while fundamentals remain the same or have improved. If fundamentals deteriorate the situation needs to be reassessed and proper actions take.

Half position initiated on 8/25/22 at $14.06.

Update 08/29/2022

Increased initial position by 30% at $13.63
Will continue to monitor the situation.