Sturm, Ruger & Company Sees 21.1% Drop in Short Interest in December

Sturm, Ruger & Company, Inc. (NYSE:RGR) experienced a significant decrease in short interest during December 2023. As of December 31, the total short interest stood at 1,008,066 shares, representing a decline of 21.1% from the December 15 figure of 1,277,059 shares. This reduction means that approximately 6.6% of the company’s shares are currently sold short.

The average daily trading volume for Sturm, Ruger is 563,432 shares, resulting in a days-to-cover ratio of 1.8 days. This metric indicates how quickly short-sellers could cover their positions if they were to buy back the shares they had borrowed.

Analysts’ Perspectives and Financial Performance

In a separate development, Weiss Ratings reaffirmed a “sell (d+)” rating for Sturm, Ruger in a note released on December 29. Available data from MarketBeat.com reveals that the stock has an average rating of “Sell” from analysts, with one analyst specifically issuing a Sell rating.

Sturm, Ruger’s financial performance has raised concerns among investors. The company reported its quarterly earnings on November 5, 2023, revealing an earnings per share (EPS) of $0.10. This figure fell short of analysts’ consensus estimates, which predicted an EPS of $0.36, missing expectations by $0.26. The firm generated revenue of $126.77 million for the quarter, surpassing the consensus estimate of $124.22 million. Nonetheless, the company reported a net margin of just 0.48% and a return on equity of 8.76%. In comparison, during the same quarter the previous year, Sturm, Ruger had posted an EPS of $0.28. Analysts forecast an EPS of 2.31 for the current fiscal year.

Dividend and Institutional Investment Activity

Sturm, Ruger also made headlines with its recent dividend announcement. On November 28, the company paid a quarterly dividend of $0.04 per share to investors of record as of November 17. This payment translates to an annualized dividend of $0.16, yielding a modest 0.4%. The company’s dividend payout ratio currently stands at 123.08%, indicating that it is distributing more than it earns.

Recent trading activity also reflects a shift among institutional investors. Several hedge funds have adjusted their stakes in Sturm, Ruger. Notably, UBS Group AG increased its holdings by 31.1% during the third quarter, acquiring an additional 122,111 shares. This brought their total ownership to 514,510 shares, valued at approximately $22.4 million.

Two Sigma Investments LP also raised its position significantly, boosting its holdings by 118.7% in the same quarter, now owning 198,936 shares worth around $8.6 million. Similarly, AQR Capital Management LLC expanded its stake by 239.4%, while Russell Investments Group Ltd. increased its holdings by a staggering 2,446.1%. Currently, institutional investors hold about 64% of Sturm, Ruger’s stock.

Founded in 1949 by William B. Ruger and Alexander McCormick Sturm, Sturm, Ruger & Company, Inc. is a prominent American firearms manufacturer based in Newport, New Hampshire. The company has established a strong reputation for precision engineering and durable products, with manufacturing facilities in Newport and Mayodan, North Carolina. Its range of products includes a diverse selection of small arms, including rifles, shotguns, and handguns.

As the situation develops, investors and analysts alike will be closely monitoring Sturm, Ruger’s performance and any further changes in market sentiment.