Smith & Wesson now sees its April quarter sales around $129 million versus the consensus of $119.8 million and versus its prior range of $113 million to $118 million.

The company’s preliminary firearm order backlog increased to about $439 million, up about 135% versus a year ago and up about 121% sequentially.  Ongoing strength in pistols and modern sporting rifles helped, as did a successful product launch.

No one wants to admit it this, but it seems as though gun demand may be running cyclical around election cycles as well.  Smith & Wesson shares are up over 5% at $6.59 versus a 52-week range of $2.29 to $8.62; Sturm, Ruger & Co. Inc. (NYSE: RGR) is down by over 5% at $40.13.  The difference between the two companies in size is that Smith Wesson is worth $428 million and Sturm Ruger is worth $768 million in market cap.

Alliant Techsystems Inc. (NYSE: ATK) has other operations tied to defense and space launches, but it is the leader in bullet manufacturing. The group’s products include brands such as Federal Premium, CCI, Speer, RCBS, Alliant Powder, Champion, Weaver, Eagle Industries, and Blackhawk! Industries. Alliant’s shares are up only 0.1% at $51.83 today and the 52-week range is $48.00 to $72.84.

Dirty Harry… “Well, we’re not going to just let you walk out of here.” Who’s We? “Smith, Wesson and me”

JON C. OGG

The unofficial closing bells put the DJIA down more than 78 points to 13,046.14 (-0.60%), the NASDAQ fell 12 points (-0.39%) to 3,063,32, and the S&P 500 fell -0.72% or about 10 points to 1,392,79.

There were several analyst upgrades and downgrades today, including Exxon Mobil Corp. (NYSE: XOM) raised to ‘neutral’ with a $92 target price at JPMorgan; Western Digital Corp. (NYSE: WDC) raised to ‘strong buy’ at Needham; Rackspace Hosting Inc. (NYSE: RAX) cut to ‘neutral’ at Goldman Sachs; Annaly Capital Management Inc. (NYSE: NLY) cut to ‘underperform’ at Sterne Agee; and Emerson Electric Co. (NYSE: EMR) raised to ‘buy’ at Nomura.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: BankAtlantic Bancorp Inc. (NYSE: BBX) is down -1.7% at $3.97; ConAgra Foods Inc. (NYSE: CAG) is down -0.6% at $26.21; Gamestop Corp. (NYSE: GME) is down -6% at $23.17; IHS Inc. (NYSE: IHS) is down -4.9% at $92.89; Lululemon Athletica Inc. (NASDAQ: LULU) is up 2.9% at $76.20 after posting a new 52-week high of $76.66 earlier today; Perry Ellis International Inc. (NASDAQ: PERY) is up 3% at $18.42; Sonic Corp. (NASDAQ: SONC) is down -6.8% at $7.50; and The9 Ltd. (NASDAQ: NCTY) is down -5% at $7.01.

Other standouts from today include the following stocks:

Dollar General Corp. (NYSE: DG) is up 3.33% at $46.24 after posting a new 52-week high of $46.95 earlier today. The discount retailer posted better than expected earnings results. More coverage here.

Discovery Communications Inc. (NASDAQ: DISCA) is down -0.35% at $48.16. The cable network may take a big loss its investment in the Oprah Winfrey Network. More coverage here.

Sturm, Ruger & Co. (NYSE: RGR) is up 13.4% at $47.95 after posting a new 52-week high today of $48.24. Smith & Wesson Holdings Co. (NASDAQ: SWHC) is up nearly 14% at $7.84 after posting a new 52-week high of $8.00. The gunmakers are rising on Ruger’s announcement that it will not be accepting any new orders until May because it is fully booked. More coverage here.

Banc Trust Financial Group Inc. (NASDAQ: BTFG) is down more than -18% at $1.22. The bank holding company warned on earnings this morning. More coverage here.

Diamond Foods Inc. (NASDAQ: DMND) is down -8% at $23.59. The snack food maker is suspending its dividend. More coverage here.

Stay tuned for Friday. Federal Reserve Chairman Ben Bernanke, Atlanta Fed President Dennis Lockhart, and St. Louis Fed President James Bullard are giving speeches. We have also noted the following event on the schedule (all times Eastern):

• 10:00 a.m. – New home sales

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Paul Ausick

In its statement, Ruger said:

• The Company’s Retailer Programs that were offered from January 1, 2012 through February 29, 2012 were very successful and generated significant orders from retailers to independent wholesale distributors for Ruger firearms.
• Year-to-date, the independent wholesale distributors placed orders with the Company for more than one million Ruger firearms.
• Despite the Company’s continuing successful efforts to increase production rates, the incoming order rate exceeds our capacity to rapidly fulfill these orders. Consequently, the Company has temporarily suspended the acceptance of new orders.

Investors obviously think that Smith & Wesson can fill the gap. Shares are up about 12% at $7.70 after posting a new 52-week high of $7.82 earlier today. The stock’s 52-week range is $2.29-$7.82.

Ruger’s shares are up more than 8% at $45.92 after it, too, posted a new 52-week high of $46.78. The stock’s 52-week range is $18.65-$46.78.

There are several stocks trading more heavily than usual this morning, and also experiencing large gains or drops in share prices. These include the Verso Paper Corp. (NYSE: VRS), Smith & Wesson Holding Corp. (NASDAQ: SWHC), Quest Software Inc. (NASDAQ: QSFT), Zogenix Inc. (NASDAQ: ZGNX), and Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR).

Verso Paper is up nearly 20% at $2.45. Volume is already more than 5x the daily average of about 144,000 shares traded. The paper maker announced yesterday that it will issue new debt of $345 in senior secured notes and has issued a tender offer for $315 million in 11.5% senior unsecured notes outstanding. Shares jumped more than 75% yesterday.

Smith & Wesson is up nearly 24% at $7.02 after posting a new 52-week high of $7.08 earlier this morning. Volume is already more than 4x the daily average of about 800,000 shares traded. The gun maker beat consensus earnings estimates after markets closed last night.

Quest Software is up nearly 22% at $23.64. Volume is already 9x the daily average of around 500,000 shares traded. The firm has agreed to be acquired at $23/share. More coverage here.

Zogenix is down more than -15% at $2.11. Volume is already higher than the daily average of around 555,000 shares traded. The drug maker posted a wider than expected loss after the markets closed yesterday..

Green Mountain Coffee is down nearly -14% at $53.71. Volume is already about double the daily average of around 5.5 million shares traded. The company is being hit hard by yesterday’s announcement from Starbucks Inc. (NASDAQ: SBUX) that it will launch a single-cup espresso and coffee machine to compete with the Keurig products from Green Mountain. More coverage here.

Paul Ausick

The Brink’s Company (NYSE: BCO), Command Security Corp. (AMEX: MOC), Corrections Corporation of America (NYSE: CXW), The GEO Group, Inc. (NYSE: GEO), Smith & Wesson Holding Corporation (NASDAQ: SWHC), Sturm, Ruger & Co. Inc. (NYSE: RGR), and TASER International Inc. (NASDAQ: TASR) are just some of the key companies that investors have to choose from when it comes to the safety of America.  We wanted to take a look at where these shares trade, what they are worth, and even if those crazy Wall Street analysts think they are good investments or not based upon consensus Thomson Reuters price target data.  We have not included the Homeland Security winners as those companies are motivated by a different issue.

The Brink’s Company (NYSE: BCO) may be considered more of a transportation company, but if the world was full of a bunch angels then it would not be needed.  The company is perhaps the world’s top provider of secure transportation and cash management services.   Banks and merchants have to secure, cash, jewelry, stones, and other small precious and valuable goods because there is an element of society that will literally kill for those goods.  This armed and secure transportation services operation trades with shares at $27.64 and its market capitalization is close to $1.3 billion.  Its 52-week trading range is $18.30 to $34.46. Sales in 2010 were $3.12 billion and Thomson Reuters sees 2011 revenues of $3.76 billion.  The consensus price target is roughly $36.00.

Command Security Corp. (AMEX: MOC) may have some overlaps that are not solely law enforcement, but this is a private security company with Rodgers Police, with over 6,000 armed and unarmed workers for the Secret Service, Fortune 1000 companies, and other government and/or private entities.  The difference here is that this company is tiny compared to peers/  It sometimes skips trading days.  At $1.59 it has a market cap of about $17.5 million and its 52-week range is $1.45 to $2.47.  Revenues in 2010 (March year-end) were over $145 million.  Unfortunately, this one just lost its CEO. This one is too small for most firms to cover it. 

Corrections Corporation of America (NYSE: CXW) is where you end up after being a bad boy and when you big ambition of life was “three-hots and a cot.”  The company owns and operates privatized correctional and detention facilities  in America. Only the federal government and three states have more facilities than the “Con Hotel” of Corrections Corporation with some 66 facilities that include 45 company-owned facilities with a total design capacity of approximately 90,000 beds in 19 states and the District of Columbia.  At Revenues in 2010 were 1.68 billion and Thomson Reuters has estimates of $1.73 billion for 2011 sales.  At $22.79, its 52-week trading range is $18.19 to $26.89 and its market capitalization is over $2.4 billion.  The consensus price target is roughly $30.00.

The GEO Group, Inc. (NYSE: GEO) competes with Corrections Corp. as it provides outsourced services managing correctional, detention, and mental health and residential treatment facilities in the United States, Australia, South Africa, and the United Kingdom.  At $24.58, the market capitalization is about $1.58 billion and the 52-week range is $19.01 to $25.95. Sales in 2010 were $1.27 billion and Thomson Reuters expects sales of about $1.64 billion in 2011.  The consensus price target is roughly $31.17.

Smith & Wesson Holding Corporation (NASDAQ: SWHC) and Sturm, Ruger & Co. Inc. (NYSE: RGR) are two of those companies which live on both sides of the ‘crime and defense sector’ when you think about it.  The arguments for and against guns are many, but crime and public-defending cannot go without bringing in the gun manufacturers.  The companies probably do not want this addressed too much, but whether you are cop or a hardened con chances are that you are packing a gun from one of these two companies or from their rivals.  Smith & Wesson trades at $3.45, has a 52-week trading range of $3.27 to $4.60, and has a market cap of about $208 million. S&W’s sales in 2010 (different fiscal year, April) over $406 million and Thomson Reuters sees sales of over $390 million in 2011. Strum Ruger trades at $20.73, and its 52-week range is $12.66 to $24.05 with a market cap of about $395 million.  Sales in 2010 were $255.2 million and Thomson Reuters sees sales of over $278 million in 2011.  Let’s not forget about home security operations as well.  The consensus price target for S&W is roughly $5.02 and the consensus price target for Sturm, Ruger is roughly $25.00.

TASER International Inc. (NASDAQ: TASR) is a controversial company because its Tasers (stun guns) have been the subject of many wrongful death suits against police departments and around the devices.  What is amazing is that the one feature is rarely addressed publicly… Police sometimes have to use force.  When you are attacking the police, or when you are resisting arrest and cannot be reasoned with that you have to go to the clink, would you rather have your head bashed with a baton, would you rather have a hollow-point-.44 enter your chest and exit your back the size of an orange, or would you rather be tasered?  At $4.48, its 52-week range is $3.52 to $5.17 and its market capitalization is approximately $270 million.  The company is now expected to run at profitability.  Sales in 2010 were $86.9 million and Thomson Reuters expects sales of over $98 million in 2010.  The consensus price target is roughly $5.17 but it is thinly followed.

Not including some of the defense companies and others like Tyco International Ltd. (NYSE: TYC) and Honeywell International Inc. (NYSE: HON) and Diebold, Incorporated (NYSE: DBD) makes this feel very incomplete, but we wanted to focus on pure-plays in security, weapons, prison, and others.  There are also dozens of OTC or Pink Sheet stocks that can fit in the category of crime and punishment, but we usually refrain from covering such small companies.
 
JON C. OGG

It seems that both Smith & Wesson Holding Corporation (NASDAQ: SWHC) and Sturm, Ruger & Co. Inc. (NYSE: RGR) would be happy that they have one fewer public gun company to compete with.  Still, it is not as if Remington and the other brands under Freedom have not already established market share.  Neither stock is up so far today either.

Freedom Group did not offer up a reason for the withdrawal.  It would be easy to speculate about the cases involving instances where Remington guns have reportedly misfired.  Whether that is the case depends upon which side you are on and we will leave it at that.  The only explanation is as follows:

• “At this time the Company has determined not to proceed with the initial public offering contemplated by the Registration Statement. The Registration Statement has not been declared effective by the Commission and the Company hereby confirms that no securities were sold in connection with the offering described in the Registration Statement. Therefore, withdrawal of the Registration Statement is consistent with the public interest and the protection of investors…”

What is  interesting is that the filing advised the SEC that it may undertake a later private offering.

Smith & Wesson Holding Corporation (NASDAQ: SWHC) has a market cap of $212 million and its sales in 2010 (April-year) of $406.1 million.  Sturm, Ruger & Co. Inc. (NYSE: RGR) has a market cap of $430 million and its 2010 sales were $255.2 million.

JON C. OGG

That was then. Now, firearms makers are having a tougher go. Smith & Wesson Holding Corp. (NASDAQ: SWHC) reported weak first-quarter 2011 earnings today. In July, competitor Sturm, Ruger & Co. Inc. (NYSE: RGR) reported lower revenue second-quarter revenue and earnings. Alliant TechSystems Inc. (NYSE: ATK), the largest ammo maker in the US, reported strong sales in its security and sporting group for its first quarter of 2011. Even stun-gun maker Taser International Inc. (NASDAQ: TASR) had a poor second quarter, though it surpassed EPS loss estimates of -$0.03 by a penny.

As with so many things these days, US gun sales have followed the economic outlook. In the first half of 2009, when doom and gloom about the economy was very high, gun sales soared as people bought firearms for personal protection, fearing that unemployment would lead to a rise in crime.

Those fears haven’t panned out. The FBI’s preliminary report for 2009 on US crimes begins by noting that violent crime fell by 5.5% in 2009 compared with 2008. Property crimes also fell, buy 4.9%.

Depending on which side of the gun-control issue one believes, the drop in numbers means either that a well-armed citizenry prevented crime or that gun buyers wasted their money.

Yet any way one looks at it, guns and ammo sales are up. The FBI’s National Instant Check System and payments to states from federal excise tax collections on sales of guns and ammo are up more than 25% in FY 2010, to more than $470 million. In August 2010, the FBI has conducted more than 1 million background checks, and 2010 is on a pace to meet or, more likely exceed, the 14 million background checks completed in 2009.

S&W shares are down nearly 9%, back up slightly after hitting a new 52-week low earlier this morning.

Paul Ausick

Corinthian Colleges Inc. (NASDAQ: COCO) is up again, still on rumors that Pershing Square’s Ackman may have a very heightened interest.

Capstead Mortgage Corp. (NYSE: CMO) is lower by 5.6% at $11.15 on thin trading volume after its $0.26 dividend declaration yesterday represented another cut.

GT Solar International Inc. (NASDAQ: SOLR) is actually higher after pricing its secondary offering of 11 million shares at $7.39 per share.  Shares are up 1% at $7.47 on more than 1 million shares.  This stock was above $8.70 before the deal became known this week.

Lululemon Athletica Inc. (NASDAQ: LULU) is surging after strong earnings this morning; shares are up9.3% at $39.20 on over 70,000 shares.

MEMC Electronic Materials Inc. (NYSE: WFR) is trading up on thin volume after its subsidiary signed a memorandum of understanding for 400MW of solar plants in a Korean province.  Shares are indicated up 2.9% at $11.00.

National Semiconductor Corporation (NYSE: NSM) is trading lower after earnings and after seeing little growth ahead. Shares are down 5.8% at $12.15 on over 60,000 shares.

Nokia Corporation (NYSE: NOK) is trading higher after naming a new CEO, which the company has been trying to reluctantly fight for weeks or months.  Shares (ADRs) are indicated up 4.4% at $10.19 on more than 2 million shares.

Irish banks are getting hit, partly on new capital raise concerns from larger healthier banks: The Bank of Ireland (NYSE: IRE) is down 3% at $3.53 and Allied Irish Banks plc (NYSE: AIB) is down 1.5% at $1.92.

Smith & Wesson Holding Corporation (NASDAQ: SWHC) is soft this morning after lower gun sales in the latest period were reported.  Shares are down 8.6% at $3.62, although trading volume is muted and barely 10,000 shares pre-market.

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JON C. OGG

We have provided the news or reason behind the move, as well as background data and added color on each where applicable.

Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) is trading up after the company licensed its obesity and weight loss drug to Eisai.  Shares closed at $3.07 yesterday and are up 15% at $3.53 on close to 300,000 shares.

Dendreon Corp. (NASDAQ: DNDN) is getting clipped aggressively this morning after the U.S. government said it will review whether PROVENGE for prostate cancer is reasonable and necessary.  This is a move meant to drive down the reimbursement rates after the price tag is so high.  Shares are down over 15% at $27.47 on over 500,000 shares. This will be one of the day’s most active stocks for sure.

Isle of Capri Casinos Inc. (NASDAQ: ISLE) is surging this morning on news that it halted a 9 million share secondary offering due to adverse stock market conditions.  Shares are up more than you might expect on the news as the stock is up over 13% at $10.50 on about 25,000 shares.

Research in Motion Ltd. (NASDAQ: RIMM) is down 0.5% this morning and\has put in yet even newer 52-week lows… Stocks hitting 52-week lows tend to keep hitting 52-week lows.  $50 was violated yesterday, now $49 is being violated this morning.

Smith & Wesson Holding Corporation (NASDAQ: SWHC) is on the move after its lower quarterly earnings were actually above estimates and after its outlook pleased investors.  Dirty Harry would be proud.  Shares of the gun-maker are up over 7.5% at $4.40 on about 20,000 shares.  The 52-week range is $3.75 to $6.98 and average shares per day is over 1 million.  Look for volume to pick up as the open gets closer.  Sturm, Ruger & Co. Inc. (NYSE: RGR) is the other player in guns, but no trades have been seen there yet.

TASER International Inc. (NASDAQ: TASR) seeing 52-week lows and is not feeling much love after it lowered estimates.  Shares are trading down just over 10% at $3.50 on about 10,000 shares.  The prior 52-week range was $3.79 to $7.88 and it trades about 1.1 million shares on average.

Yahoo! Inc. (NASDAQ: YHOO) is indicated higher, although on somewhat thin trading volume.  The lagging internet giant has authorized a new repurchase plan for shares up to $3 billion over the next three years to replace its prior $3 billion plan.  The prior plan had only about $300+ million remaining on it.  Shares are up 1.1% at $13.99 on only about 30,000 shares.

JON C. OGG

Smith & Wesson Holding Corp. (NASDAQ: SWHC) is off 12% on earnings and guidance; we’d watch for added fallout in Sturm, Ruger & Co. Inc. (NYSE: RGR).

Take-Two Interactive Software (NASDAQ: TTWO) is down 20% on its warning.

Bank of America Corp. (NYSE: BAC) is trading down 1.7%, but not as much as the deal price, after increasing its capital raise.

Marvell Technology Group Ltd. (NASDAQ: MRVL) is at new 52-week highs after higher earnings and higher guidance.  We’d watch Broadcom Corporation (NASDAQ: BRCM) and Texas Instruments Inc. (NYSE: TXN) on the news.

Facet Biotech Corporation  (NASDAQ: FACT) is down slightly despite a boosted buyout offer.

Sun Microsystems, Inc. (NASDAQ: JAVA) is up over 5% on a report that the EU may be flawed and/or appeased in its block of the Oracle deal.

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JON C. OGG