Stock Traders Buy Large Volume of Put Options on Sturm, Ruger & Company, Inc. (NYSE:RGR)

Key Points

• Unusual bearish options activity: Traders bought 2,921 put options on Sturm, Ruger, roughly 1,271% above the average volume of 213 contracts, signaling increased downside protection or volatility concerns.
• Shares rose 9.2% to $40.50 despite the heavy put activity, while the company reported quarterly EPS of $0.52 and revenue of $158.06 million, exceeding analyst expectations.
• Beretta-related developments support the stock: Beretta offered $44.80 per share in cash and Ruger ended or amended its shareholder-rights plan, although FTC restrictions on board appointments and an investor investigation add uncertainty.

Sturm, Ruger & Company, Inc. (NYSE:RGR - Get Free Report) was the target of some unusual options trading on Thursday. Stock traders bought 2,921 put options on the company. This is an increase of approximately 1,271% compared to the average volume of 213 put options.

Institutional Inflows and Outflows

Several institutional investors have recently made changes to their positions in RGR. Group One Trading LLC purchased a new position in shares of Sturm, Ruger & Company, Inc. during the 1st quarter valued at $33,000. Deprince Race & Zollo Inc. increased its stake in Sturm, Ruger & Company, Inc. by 0.9% in the 1st quarter. Deprince Race & Zollo Inc. now owns 94,049 shares of the company's stock worth $3,770,000 after buying an additional 880 shares in the last quarter. Public Employees Retirement System of Ohio bought a new stake in Sturm, Ruger & Company, Inc. during the second quarter valued at about $39,000. Meeder Asset Management Inc. raised its holdings in Sturm, Ruger & Company, Inc. by 32.4% during the first quarter. Meeder Asset Management Inc. now owns 5,956 shares of the company's stock valued at $239,000 after acquiring an additional 1,456 shares during the period. Finally, Parvin Asset Management LLC lifted its position in shares of Sturm, Ruger & Company, Inc. by 8.5% in the first quarter. Parvin Asset Management LLC now owns 36,300 shares of the company's stock valued at $1,455,000 after acquiring an additional 2,830 shares in the last quarter. Institutional investors own 64.00% of the company's stock.

Sturm, Ruger & Company, Inc. Trading Up 9.2%

Shares of NYSE:RGR traded up $3.42 on Thursday, reaching $40.50. 206,962 shares of the company traded hands, compared to its average volume of 150,735. The stock has a market capitalization of $647.19 million, a P/E ratio of 53.65 and a beta of 0.19. The business's 50-day simple moving average is $38.02 and its 200 day simple moving average is $39.16. Sturm, Ruger & Company, Inc. has a 52 week low of $28.33 and a 52 week high of $48.21.

Sturm, Ruger & Company, Inc. (NYSE:RGR - Get Free Report) last released its earnings results on Wednesday, July 29th. The company reported $0.52 earnings per share for the quarter, beating analysts' consensus estimates of $0.42 by $0.10. The company had revenue of $158.06 million during the quarter, compared to analyst estimates of $128.54 million. Sturm, Ruger & Company, Inc. had a return on equity of 6.58% and a net margin of 2.11%.Sturm, Ruger & Company, Inc.'s revenue for the quarter was up 19.3% on a year-over-year basis. During the same quarter in the previous year, the company posted $0.41 EPS. Sell-side analysts expect that Sturm, Ruger & Company, Inc. will post 1.49 EPS for the current fiscal year.

Sturm, Ruger & Company, Inc. Increases Dividend

The company also recently disclosed a quarterly dividend, which was paid on Friday, August 28th. Shareholders of record on Friday, August 14th were given a dividend of $0.21 per share. This represents a $0.84 annualized dividend and a yield of 2.1%. The ex-dividend date of this dividend was Friday, August 14th. This is a positive change from Sturm, Ruger & Company, Inc.'s previous quarterly dividend of $0.11. Sturm, Ruger & Company, Inc.'s payout ratio is presently 112.00%.

More Sturm, Ruger & Company, Inc. News

Here are the key news stories impacting Sturm, Ruger & Company, Inc. this week:

• Positive Sentiment: Beretta offers $44.80 per share in cash: Beretta Holding S.A. formally launched a tender offer for Ruger shares, providing a clear valuation benchmark above recent trading levels and supporting the stock price. Beretta intends to increase its stake from approximately 10% to as much as 25%. Beretta cash tender offer
• Positive Sentiment: Strategic cooperation agreement clears regulatory conditions: Ruger said applicable regulatory requirements for its previously announced agreement with Beretta have been satisfied. The companies can therefore proceed with the agreement’s planned amendment to Ruger’s shareholder-rights arrangements. Ruger strategic cooperation update
• Positive Sentiment: Rights plan removed or amended: Ruger ended its shareholder rights plan following the Beretta agreement, reducing a potential obstacle to Beretta’s investment and helping advance the transaction. Ruger ends shareholder rights plan
• Neutral Sentiment: FTC restrictions limit Beretta’s influence: Regulatory action reportedly prevents Beretta from appointing directors to Ruger’s board as part of the deal. This reduces near-term control concerns but may also limit the strategic benefits Beretta can pursue. FTC Beretta board restrictions
• Negative Sentiment: Legal and trading-risk signals remain: Brodsky & Smith announced an investigation related to Ruger, while unusually heavy put-option activity indicates some investors are positioning for downside or heightened volatility. Neither item establishes wrongdoing or guarantees a decline, but both add uncertainty. Brodsky and Smith investor investigation

Analyst Upgrades and Downgrades

RGR has been the subject of several research analyst reports. Zacks Research lowered Sturm, Ruger & Company, Inc. from a "hold" rating to a "strong sell" rating in a research note on Thursday, August 6th. Weiss Ratings raised Sturm, Ruger & Company, Inc. from a "sell (d+)" rating to a "hold (c)" rating in a report on Monday, August 3rd. Finally, Wall Street Zen raised Sturm, Ruger & Company, Inc. from a "buy" rating to a "strong-buy" rating in a report on Saturday, August 1st. One analyst has rated the stock with a Buy rating, one has assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and a consensus target price of $46.00.

About Sturm, Ruger & Company, Inc.

Sturm, Ruger & Company, Inc designs, manufactures, and sells firearms for the commercial sporting market. Its product portfolio includes modern sporting rifles, bolt-action rifles, single-shot rifles, autoloading rifles, shotguns, pistols, and revolvers. The company markets its products primarily under the Ruger brand.

Founded in 1949 by William B. Ruger and Alexander McCormick Sturm, the company has developed a broad lineup serving hunters, sport shooters, firearm collectors, and personal-protection customers.

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