Welcome back to Trading 360. I'm Marley Kaden. It's time for the big three.We've got three stocks for you, three charts we'll be taking you through. Alex Coffee will be taking care of the technicals for us today. And here to take us through the picks for the big three, Tim Bowen, the chief technical trainer at stockstorade.com. Tim, great to have you with us. Our last guest said to me that uh he used to not be a fan of Mondays, but he's really starting to dislike Fridays because of all the de-risisking that ...

Core Insights - Smith & Wesson Brands (SWBI) reported strong fiscal third-quarter results, exceeding Wall Street expectations and leading to an 18% surge in stock price, reaching a new 52-week high [1][2] - The company's handgun sales increased significantly, indicating a potential market share gain from smaller competitors despite a general decline in industry demand [1] Financial Performance - SWBI achieved net sales of $135.7 million, a 17.1% increase from the previous year, surpassing consensus estimates of $125 million to $128 million [4] - Adjusted earnings per share were reported at $0.08, exceeding forecasts of $0.04 to $0.05 and more than doubling last year's figure of $0.03 [4] - Gross margin improved to 26.2% from 24.1%, driven by higher average selling prices and a favorable product mix [4] - Adjusted EBITDA rose nearly 21% to $16.8 million [4] Future Outlook - Management provided optimistic guidance, projecting 10% to 12% sales growth for Q4 compared to the same period last year [5] - The company plans to increase production to meet rising demand, having previously managed inventory levels effectively [5][6] - SWBI's shift from inventory discipline to ramping up production reflects confidence in sustained order strength [6]

Core Viewpoint - The firearms industry is deeply embedded in American culture and has a long historical significance in the United States [1]. Industry Overview - The firearms industry is characterized as one of the most quintessentially American businesses, with a history that spans centuries [1]. - Major firearms manufacturers are predominantly based in the United States, reflecting the cultural ties between firearms and American identity [1].

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential opportunities for traders before the market opens [1] Premarket Gainers - Innovation Beverage Group Limited (IBG) is up 70% at $7.35 [3] - Cre8 Enterprise Limited (CRE) is up 55% at $4.27 [3] - Battalion Oil Corporation (BATL) is up 26% at $24.00 [3] - Omada Health, Inc. (OMDA) is up 19% at $16.19 [3] - Mexco Energy Corporation (MXC) is up 15% at $15.18 [3] - TMD Energy Limited (TMDE) is up 14% at $3.50 [3] - Marvell Technology, Inc. (MRVL) is up 12% at $85.01 [3] - Smith & Wesson Brands, Inc. (SWBI) is up 12% at $13.22 [3] - Entravision Communications Corporation (EVC) is up 12% at $3.41 [3] - Samsara Inc. (IOT) is up 11% at $33.08 [3] Premarket Losers - Nutex Health Inc. (NUTX) is down 28% at $75.62 [4] - Owlet, Inc. (OWLT) is down 23% at $8.96 [4] - Maris-Tech Ltd. (MTEK) is down 22% at $1.61 [4] - Republic Power Group Limited (RPGL) is down 14% at $1.32 [4] - Ingram Micro Holding Corporation (INGM) is down 12% at $22.98 [4] - NCR Atleos Corporation (NATL) is down 8% at $42.45 [4] - REalloys Inc. (ALOY) is down 7% at $20.10 [4] - VCI Global Limited (VCIG) is down 7% at $4.75 [4] - The Gap, Inc. (GAP) is down 6% at $25.33 [4] - BCP Investment Corp. (BCIC) is down 5% at $10.81 [4]

Core Insights - Smith & Wesson Brands, Inc. (SWBI) anticipates a sales growth of 10% to 12% in Q4 2026, driven by increasing momentum in handgun sales [2] Management View - The President, CEO & Director Mark Smith highlighted that the third quarter results showed continued growth in market share, strong pricing power, and profitability [2] - The company's success is attributed to a disciplined focus on its long-term strategy and a "laser" focus on execution [2]

Core Insights - The company reported strong third-quarter results, achieving over 17% year-over-year growth in net sales, driven by market share gains and effective pricing strategies [6][20] - The brand's focus on innovation and product development has led to impressive average selling prices and strong profit margins [6][19] - The company is optimistic about future growth, expecting a 10% to 12% increase in fourth-quarter sales compared to the previous year [24] Financial Performance - Net sales reached nearly $136 million, a 17.1% increase year-over-year, with EBITDA rising nearly 21% to $16.8 million [6][20] - Adjusted EPS improved to $0.08 from $0.03 in the prior year, reflecting strong operational performance [6][23] - Operating cash flow increased by over $30 million year-over-year, indicating effective capital deployment [6] Product Performance - Handgun unit shipments increased by 28%, while long gun shipments decreased by 25%, attributed to prior-year channel fill [7][9] - New products accounted for 44% of handgun shipments and 28% of long gun shipments, showcasing the success of the innovation strategy [10] - Average selling prices for handguns rose by 5.2% to over $119, while long gun ASPs were $535, down about 11% year-over-year [12][21] Market Trends - The company noted a favorable shift in product mix towards higher-priced models, contributing to improved profitability [7][12] - Distributor inventory levels remained stable at approximately nine weeks, indicating solid sell-through at retail [15][20] - The company is focused on increasing production to meet market demand, which is expected to positively impact margins [22] Strategic Initiatives - The Smith & Wesson Academy is exceeding expectations, enhancing the company's presence in the law enforcement market [17] - The company has shipped to nearly 1,000 law enforcement agencies in the past 18 months, indicating strong momentum in this segment [17][31] - The company is committed to operational excellence and maintaining a strong balance sheet, positioning itself for continued success [19]

Financial Data and Key Metrics Changes - Net sales increased over 17% year-over-year to nearly $136 million, reflecting strong performance [5][17] - EBITDA rose nearly 21% to $16.8 million, with adjusted EPS increasing from $0.03 to $0.08 [6][19] - Operating cash flow grew by more than $30 million year-over-year, reaching over $20 million in the quarter [6][19] - Gross margin improved by 210 basis points to 26.2%, driven by increased production volume and lower promotion costs [18] Business Line Data and Key Metrics Changes - Handgun unit shipments increased by 28%, while NICS data showed a decline of 2.2%, indicating market share growth [7][8] - Long gun shipments decreased by 25%, with NICS down 5.6%, attributed to prior year channel fill and product mix [8][9] - New products accounted for 44% of handgun shipments and 28% of long gun shipments, showcasing innovation's impact on sales [9] Market Data and Key Metrics Changes - Distributor inventory levels remained flat at approximately nine weeks of supply, indicating stable demand [12][17] - The overall market for firearms showed a stable environment, with expectations for continued strong demand [17][21] Company Strategy and Development Direction - The company is focused on innovation and maintaining pricing power, with a strategic emphasis on product development and market trends [5][16] - The Smith & Wesson Academy is exceeding expectations, contributing to growth in both consumer and law enforcement channels [13][14] - The company aims to reduce debt and strengthen its financial position, ending Q3 with $75 million in debt [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's strength and product assortment, anticipating Q4 sales growth of 10%-12% over the previous year [21] - The company expects to see an increase in gross margin in Q4 due to higher production and demand [21] - Management highlighted a healthy pipeline for law enforcement sales, indicating a focus on this segment for future growth [33][34] Other Important Information - The company paid $5.8 million in dividends and ended the quarter with $23.5 million in cash and investments [20] - Capital spending for the year is expected to be between $25 million and $30 million [20] Q&A Session Summary Question: Recent pricing changes - Management confirmed a price increase of approximately 3% effective January 1, with no pushback from distributors or consumers [24][25] Question: Strength in handgun sales - Management attributed strong handgun sales to successful product refreshes and market trend alignment, particularly in the polymer pistol line [26][28] Question: Long gun market strategies - Management acknowledged challenges in the long gun market but noted potential opportunities in the hunting category and SBRs [29][30] Question: Law enforcement sales opportunities - Management emphasized the focus on law enforcement sales, highlighting a healthy pipeline and ongoing innovation in this area [32][34]

Financial Data and Key Metrics Changes - Net sales increased over 17% year-over-year to nearly $136 million, representing a growth of $19.8 million [5][17] - EBITDA rose nearly 21% to $16.8 million [6] - Adjusted EPS improved to $0.08 from $0.03 in the prior year [6][19] - Operating cash flow increased by more than $30 million year-over-year [6] Business Line Data and Key Metrics Changes - Handgun unit shipments into the sporting goods channel were up 28%, while NICS was down 2.2%, indicating significant market share growth [7] - Long gun shipments into the sporting goods channel decreased by 25%, with overall NICS down 5.6% [8] - New products accounted for 44% of handgun shipments and 28% of long gun shipments during the quarter [9] Market Data and Key Metrics Changes - Distributor inventory increased by approximately 20% over the end of the prior quarter, but only by about 4% compared with the end of January 2025, with weeks of supply steady at approximately nine weeks [17] - Average selling prices (ASPs) for handguns increased by 5.2% year-over-year to over $419, while long gun ASPs decreased by about 11% to $535 [10][18] Company Strategy and Development Direction - The company is focused on innovation and maintaining pricing power, which has led to strong profit margins and balance sheet performance [5] - The Smith & Wesson Academy is exceeding expectations and contributing to growth in both consumer and law enforcement channels [13][14] - The company aims to continue aligning production with sales expectations to drive results [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the brand and product assortment, expecting fourth-quarter sales to be up 10%-12% over Q4 2025 [21] - The company anticipates a small reduction in channel inventory as distributors prepare for slower summer months [21] - A healthy sales pipeline and momentum in law enforcement sales were highlighted as key growth areas [33][34] Other Important Information - The company ended Q3 with $75 million in debt, down from $90 million at the end of Q2, and paid down an additional $20 million after the quarter [11][20] - Cash generated from operations was $20.5 million, compared to cash used from operations of $9.8 million in the prior year [19] Q&A Session Summary Question: Recent pricing changes - Management confirmed a price increase effective January 1, approximately 3% across the board, with no pushback from distributors or consumers [24][25] Question: Strength in handgun sales - Management attributed strong handgun sales to successful product refreshment and alignment with market trends, particularly in the compact and full-size markets [26][28] Question: Long gun market strategies - Management acknowledged challenges in the long gun market but noted opportunities in the hunting category and potential for growth in SBRs [29][30] Question: Law enforcement sales opportunities - Management emphasized the focus on law enforcement as a growth area, with a healthy pipeline and ongoing innovation in products for this segment [32][34]

Financial Data and Key Metrics Changes - Net sales increased over 17% year-over-year to nearly $136 million, reflecting strong performance [5][17] - EBITDA rose nearly 21% to $16.8 million, with adjusted EPS increasing from $0.03 to $0.08 [6][19] - Operating cash flow grew by more than $30 million year-over-year, reaching over $20 million in the quarter [6][20] - Gross margin improved by 210 basis points to 26.2%, driven by increased production volume and lower promotion costs [18] Business Line Data and Key Metrics Changes - Handgun unit shipments increased by 28%, while long gun shipments decreased by 25% [6][8] - Average selling prices (ASPs) for handguns rose by 5.2% to over $419, while long gun ASPs decreased by about 11% to $535 [10][18] - New products accounted for 44% of handgun shipments and 28% of long gun shipments during the quarter [9] Market Data and Key Metrics Changes - Distributor inventory levels remained flat at approximately nine weeks of supply, indicating solid sell-through at retail [12][17] - Adjusted NICS data showed a 2.2% decline, while overall NICS for long guns was down 5.6% [6][8] Company Strategy and Development Direction - The company is focused on innovation and maintaining pricing power, with a strategic emphasis on product development and market trends [5][15] - The Smith & Wesson Academy is exceeding expectations and contributing to growth in both consumer and law enforcement channels [13][14] - The company aims to continue reducing debt and strengthening its financial position, ending Q3 with $75 million in debt [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's strength and product assortment, anticipating Q4 sales growth of 10%-12% over the previous year [21] - The company expects gross margins to increase in Q4 due to higher production and a favorable sales environment [22] - Management highlighted a healthy sales pipeline in the law enforcement sector, indicating potential for future revenue growth [33][34] Other Important Information - The company paid $5.8 million in dividends and ended the quarter with $23.5 million in cash and investments [20] - Capital spending for the year is expected to be between $25 million and $30 million [20] Q&A Session Summary Question: Recent pricing changes and their impact - Management confirmed a price increase of approximately 3% effective January 1, with no pushback from distributors or consumers [24][25] Question: Strength in handgun sales - Management attributed strong handgun sales to successful product refreshment and alignment with market trends [26][28] Question: Opportunities in the long gun market - Management acknowledged challenges in the long gun segment but noted potential for growth in the hunting category and SBRs [29][30] Question: Law enforcement market opportunities - Management emphasized the focus on law enforcement sales, highlighting a healthy pipeline and ongoing innovation in products [32][34]

Core Insights - Smith & Wesson Brands reported strong third-quarter financial results, with sales of $135.71 million, representing a 17.1% year-over-year increase, surpassing the Street consensus estimate of $125.59 million [1] - The company achieved earnings per share of eight cents, exceeding the consensus estimate of five cents per share, indicating robust market share growth and pricing power [2] - The company anticipates fourth-quarter sales to increase by 10% to 12% year-over-year, projecting sales between $154.88 million and $168.96 million, compared to a Street forecast of $142.25 million [3] Sales and Earnings Performance - Third-quarter sales reached $135.71 million, up 17.1% from the previous year, beating expectations [1] - Earnings per share were reported at eight cents, higher than the expected five cents [2] - Handgun unit shipments in the sporting goods channel increased by 28% year-over-year, contributing to exceptional performance [2] Future Outlook - The company is guiding for fourth-quarter sales growth of 10% to 12% year-over-year, with projected sales between $154.88 million and $168.96 million [3] - Focus is shifting from reducing inventory levels to increasing production to meet market demand, which is expected to positively impact margins [4] Stock Performance - Smith & Wesson shares rose by 11.20% to $13.11 in after-hours trading, with a 52-week trading range of $7.73 to $12.15 [4]