VSTO
Vista Outdoor Inc
Consumer
06/22/2015
Presented
| Date | 06/17/2015 |
| Price | 47.39 |
| Market Cap | $3.01B |
| Ent Value | $3.10B |
| P/E Ratio | 37.9x |
| Book Value | $25.81 |
| Div Yield | N/A |
| Shares O/S | 63.61M |
| Ave Daily Vol | 330,000 |
| Short Int | 3.12% |
Current
| Price | $44.15 |
| Market Cap | $2.99B |
| Vista Outdoor Inc., together with its subsidiaries, designs, manufactures, and markets consumer products for the outdoor sports and recreation markets in the United States and internationally. It operates through two segments, Shooting Sports and Outdoor Products. The Shooting Sports segment designs, develops, produces, and sources ammunition for the hunting and sport shooting enthusiast markets, as well as for local law enforcement, the United States government, and international markets under the Federal Premium, Speer, American Eagle, Blazer, CCI, Estate Cartridge, Fusion, and Independence brands. This segment also provides firearms products, such as centerfire rifles, rimfire rifles, shotguns, and range systems for the hunting and sport shooting enthusiast markets under the Savage Arms, Savage Range Systems, and Stevens brands. The Outdoor Products segment offers binoculars, trail cameras, target systems, mounts, game calls, decoys, blinds, safety and protective eyewear products, fashion and sports eyewear products, laser rangefinders, archery accessories, riflescopes, hunting laser rangefinders, gun care products, reloading equipment, gun powder, and targets under the brand names of Alliant Powder, BLACKHAWK!, Bollé, Bushnell, Butler Creek, Champion, Gold Tip, Gunslick Pro, Hoppe's, Millett, Outers, Primos, RCBS, Serengeti, Simmons, Tasco, Uncle Mike's, and Weaver. It also provides tactical systems and equipment for the United States government, allies of the United States, and law enforcement under the BLACKHAWK!, Eagle, and Uncle Mike's brand names. The company sells its products to outdoor enthusiasts, hunters and recreational shooters, athletes, and law enforcement and military professionals through various mass, specialty, and independent retailers. Vista Outdoor Inc. was incorporated in 2014 and is headquartered in Clearfield, Utah. |
Publicly traded companies mentioned herein: Cabela’s Inc (CAB), Dick’s Sporting Goods Inc (DKS), Jarden Corp (JAH), Orbital ATK Inc (OA), Vista Outdoor Inc (VSTO)
Highlights
The presenter is short shares of Vista Outdoor (VSTO) and sees meaningful downside risk for shareholders over the next 12-18 months. VSTO was spun-off from ATK when it merged with Orbital in the first quarter of 2015 and at first glance it appears to be a neat, classic spin-off situation (clean balance sheet, ability to lever up, etc.). While it is not the most liquid stock, the presenter is comfortable with the market cap and daily dollar volume traded. Since 2007 ammo sales growth has outpaced guns sales growth by a wider than normal margin and he sees the potential for ammo sales to revert to a more normal level relative to gun sales. If this thesis plays out the margin degradation would result in a major hit to earnings as operating margins are well below gross margins.
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