Smith & Wesson; stock down, but not their prices...

Skans · September 23, 2014, 11:25 AM

Here's an interesting observation: Smith and Wesson's stock price is down over 45% off its high for the year. The company lowered its expectations on gross revenue derived from gun sales in the coming months. However, I still can't find a S&W 627 2" (8-shot 357) for under $1,000!

Hey, Smith & Wesson - What are you waiting for? When the stock price hits $5 will you then think about lowering your prices so that we can, once again, afford to buy your revolvers???

**Tom Servo** · September 23, 2014, 12:14 PM

Stock prices aren't directly related to the price of goods a company produces.

Wholesale prices on Smith revolvers have gone up more than $20-30 since 2012. If local retail prices are higher, it's a result of the market downstream.

Kimio · September 23, 2014, 12:31 PM

Stocks from my recollection do not affect the prices of the goods a business produces.

Inflation of local currency as well as the laws of supply and demand among a myriad number of other things govern the price of said goods. As shipping and manufacturing prices go up, so does the price of the goods that are being sold.

Simple economics really.

buck460XVR · September 23, 2014, 12:31 PM

I've noticed a drop in S&W revolvers in the last month or so. I have seen 637s , 642s and 638s advertised for below $350 again. Hopefully L-Frames and N-Frames will also drop back to reality once they make it to the shelves again.

aaronsc · September 24, 2014, 02:18 PM

I believe the stocks are down due to the huge drop in AR sales. There has also always been a surplus of J frames at my LGSs so they have always stayed between $350-400.
S&W, however, has seemed to keep supply of there larger frame revolvers just behind demand, so I wouldn't expect to see a huge price drop there in near future.

lamarw · September 24, 2014, 08:05 PM

There is one direct relationship between product price and stock value. It is profit.

I suspect the only place S&W can reduce price is to cut profit. Cutting profit with further reduce stock value.

Remember not only is S&W making a profit but also their distributors and their authorized dealers. When you buy a new firearm you are paying the cost and the profit of the manufacturer, the middle parties and the ultimate seller to the buyer.

Your local guns store could reduce his cost to buyers by two to three percent if he simply did not accept plastic for payments. (so could your grocery store on groceries) The problem is we have become a society that wants the convenience of plastic and/or credit. It adds another middle party to the commerce industry with zero value added to the end product.

Skans · September 25, 2014, 08:09 AM

lamarw, you are looking at this from a cost of manufacturing perspective. My thought is that if S&W stock is down 40%, then that means the demand for product is also down by about that much. Now, perhaps this means that no one is selling any more AR's. My hope is that it means that demand for some of their high-end revolvers is down too and a bunch are sitting on shelves.

My very self-motivated reason for wishing this is to pick up a 627 8-shot 357 for a couple hundred less than what they have been selling for. I suppose if I had S&W stock, my hopes would go in the other direction.

lamarw · September 25, 2014, 08:31 AM

I catch your drift. Just checked GunBroker and there were six or more listed as NIB for under a thousand. Several were under $900.

Not sure if low price is your only requirement and there is shipping cost plus FFL cost to tack on.

g.willikers · September 25, 2014, 09:09 AM

Stock prices reflect the stock market, not necessarily the company's product and sales market.
Often two very different areas of investments, not necessarily directly related.

Skans · September 25, 2014, 12:44 PM

Its the one with a 2" (or so) barrel that I'm looking for; not the 4" 627.

TailGator · September 25, 2014, 03:09 PM

Quote:

Your local guns store could reduce his cost to buyers by two to three percent if he simply did not accept plastic for payments. (so could your grocery store on groceries) The problem is we have become a society that wants the convenience of plastic and/or credit. It adds another middle party to the commerce industry with zero value added to the end product.

I don't think this can be overemphasized as a problem in the modern US economy. A small local store of any sort can hardly ever do better than a 2% charge for accepting debit and credit cards. The banks are getting 2% of the gross for those businesses (including mine). That means if you are doing real well and making what would otherwise be a 20% profit, the banks get 10% of your profit just for accepting your deposit and you are down to an 18% profit margin. If your business makes a more modest 10% profit like mine, it costs you 20% of your profit just to collect your fees!

Banks are making money. Lots of smaller companies are struggling to feed the banks. I don't suppose this applies directly to S&W since they aren't direct retailers, but we all should be aware that we do small firms big favors when we use cash in face to face transactions.

kilimanjaro · September 25, 2014, 04:04 PM

Between the credit fees and business taxes here in Washington state, the two of them add up to about 5% of gross sales. Really serves to knock a profit margin down.

September 23, 2014, 11:25 AM	#1
Skans Senior Member Join Date: November 20, 2008 Posts: 11,132	Smith & Wesson; stock down, but not their prices... Here's an interesting observation: Smith and Wesson's stock price is down over 45% off its high for the year. The company lowered its expectations on gross revenue derived from gun sales in the coming months. However, I still can't find a S&W 627 2" (8-shot 357) for under $1,000! Hey, Smith & Wesson - What are you waiting for? When the stock price hits $5 will you then think about lowering your prices so that we can, once again, afford to buy your revolvers???

September 23, 2014, 12:14 PM	#2
Tom Servo Staff Join Date: September 27, 2008 Location: Foothills of the Appalachians Posts: 13,059	Stock prices aren't directly related to the price of goods a company produces. Wholesale prices on Smith revolvers have gone up more than $20-30 since 2012. If local retail prices are higher, it's a result of the market downstream. __________________ Sometimes it’s nice not to destroy the world for a change. --Randall Munroe

September 25, 2014, 09:09 AM	#9
g.willikers Senior Member Join Date: September 28, 2008 Posts: 10,442	Stock prices reflect the stock market, not necessarily the company's product and sales market. Often two very different areas of investments, not necessarily directly related. __________________ Walt Kelly, alias Pogo, sez: “Don't take life so serious, son, it ain't nohow permanent.”

September 23, 2014, 12:31 PM	#3
Kimio Senior Member Join Date: January 2, 2011 Location: Arizona Posts: 1,171	Stocks from my recollection do not affect the prices of the goods a business produces. Inflation of local currency as well as the laws of supply and demand among a myriad number of other things govern the price of said goods. As shipping and manufacturing prices go up, so does the price of the goods that are being sold. Simple economics really.

September 23, 2014, 12:31 PM	#4
buck460XVR Senior Member Join Date: December 28, 2006 Posts: 4,342	I've noticed a drop in S&W revolvers in the last month or so. I have seen 637s , 642s and 638s advertised for below $350 again. Hopefully L-Frames and N-Frames will also drop back to reality once they make it to the shelves again.

September 24, 2014, 02:18 PM	#5
aaronsc Member Join Date: September 20, 2012 Location: North FL Posts: 71	I believe the stocks are down due to the huge drop in AR sales. There has also always been a surplus of J frames at my LGSs so they have always stayed between $350-400. S&W, however, has seemed to keep supply of there larger frame revolvers just behind demand, so I wouldn't expect to see a huge price drop there in near future.

September 24, 2014, 08:05 PM	#6
lamarw Senior Member Join Date: April 12, 2010 Location: Lake Martin, AL Posts: 3,311	There is one direct relationship between product price and stock value. It is profit. I suspect the only place S&W can reduce price is to cut profit. Cutting profit with further reduce stock value. Remember not only is S&W making a profit but also their distributors and their authorized dealers. When you buy a new firearm you are paying the cost and the profit of the manufacturer, the middle parties and the ultimate seller to the buyer. Your local guns store could reduce his cost to buyers by two to three percent if he simply did not accept plastic for payments. (so could your grocery store on groceries) The problem is we have become a society that wants the convenience of plastic and/or credit. It adds another middle party to the commerce industry with zero value added to the end product.

September 25, 2014, 08:09 AM	#7
Skans Senior Member Join Date: November 20, 2008 Posts: 11,132	lamarw, you are looking at this from a cost of manufacturing perspective. My thought is that if S&W stock is down 40%, then that means the demand for product is also down by about that much. Now, perhaps this means that no one is selling any more AR's. My hope is that it means that demand for some of their high-end revolvers is down too and a bunch are sitting on shelves. My very self-motivated reason for wishing this is to pick up a 627 8-shot 357 for a couple hundred less than what they have been selling for. I suppose if I had S&W stock, my hopes would go in the other direction.

September 25, 2014, 08:31 AM	#8
lamarw Senior Member Join Date: April 12, 2010 Location: Lake Martin, AL Posts: 3,311	I catch your drift. Just checked GunBroker and there were six or more listed as NIB for under a thousand. Several were under $900. Not sure if low price is your only requirement and there is shipping cost plus FFL cost to tack on.

September 25, 2014, 12:44 PM	#10
Skans Senior Member Join Date: November 20, 2008 Posts: 11,132	Its the one with a 2" (or so) barrel that I'm looking for; not the 4" 627.

September 25, 2014, 04:04 PM	#12
kilimanjaro Senior Member Join Date: November 23, 2009 Posts: 3,963	Between the credit fees and business taxes here in Washington state, the two of them add up to about 5% of gross sales. Really serves to knock a profit margin down.