For years, Outdoor Holding Company (formerly AMMO Inc.) ( POWW ) tried to be both a high margin digital marketplace (GunBroker.com) and a capital-intensive manufacturer of ammunition. Unfortunately, it didn't work. The low margin manufacturing business obscured the profitability ofI'm a fundamental investor who targets situations where the market has pushed a company’s valuation far out of line with its underlying economics. My professional background in corporate financial analysis has deeply shaped my inv ...

Core Insights - Outdoor Holding Company operates in the competitive firearms and ammunition industry, alongside notable peers such as Smith & Wesson Brands, Vista Outdoor, American Outdoor Brands, Sturm, Ruger, and Sportsman's Warehouse [1] Financial Performance - Outdoor Holding Company has a Return on Invested Capital (ROIC) of -18.08%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 9.41%, indicating inefficiencies in capital investments [2] - Smith & Wesson Brands has a ROIC of 3.07% and a WACC of 7.58%, resulting in a ROIC to WACC ratio of 0.41, suggesting better financial efficiency compared to Outdoor Holding Company [3] - Vista Outdoor Inc. has a ROIC of 4.84% and a WACC of 7.00%, leading to the highest ROIC to WACC ratio of 0.69 among peers, indicating effective capital allocation [4] - American Outdoor Brands and Sportsman's Warehouse have negative ROICs of -2.26% and -2.64%, respectively, but their WACC figures are lower than Outdoor Holding Company's, resulting in better ROIC to WACC ratios of -0.46 and -0.77 [5]