Smith & Wesson on fire, but can it last? - Top Stocks Blog - MSN Money

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Smith & Wesson (SWHC ) will announce earnings after the close today.  With forecasts putting earnings at a spectacular 10 cents per share -- a 100% increase over the same quarter last year -- and the stock enjoying a 133% rise since the beginning of the year, the question is how much further can SWHC go?

Some investors are worried that gun sales may be flattening, or even falling.  Smith & Wesson certainly enjoyed a nice boost when the current Administration came to power and again when Supreme Court Justice Sonya Sotomayor was nominated.

But many analysts believe that the federal government has enough to do right now, and that taking on millions of firearms owners and the powerful National Rifle Association is not near the top of the Obama “to do” list.

Analysts who cover Smith & Wesson expect the firm’s July quarter to be a good one. In addition to the healthy forecasted earnings increase, sales are expected to rise 20% to $97 million. At the current stock price of $5.33, Smith & Wesson trades at less than one time sales, which would appear to be cheap for a firm that is so profitable.

But trends in firearm sales may actually make the stock relatively expensive.

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