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NordicVetMBA
Jul 1, 2022 7:11 PM

POWW Long

AMMO, Inc.NASDAQ

Description

The ammunition industry has been far behind in production capacity to meet the enormous increase in demand. As long as crime continues to be a problem in America, there will be an outsized level of demand. POWW Just opened a state of the art ammo plant in Q2, revenues have grown from $0 in 2016 (startup) to $62.482 million in 2021; with company and analyst estimates putting 2023 @ $300-$320 million.

Ammo Inc published revenue growth of 285% for 2022 on June 30, 2022 and price is up 8.44% as of today (July 1).

NASDAQ:POWW

Earnings - https://www.nasdaq.com/market-activity/stocks/poww/earnings

Insider Activity - all buys, no sells - https://www.nasdaq.com/market-activity/stocks/poww/insider-activity

Potential short-squeeze on the ESG nuts - https://www.nasdaq.com/market-activity/stocks/poww/short-interest

I am long on POWW as of today, and POWWP. POWW Preferred (POWWP is currently yielding 8.62%)
Comments
NordicVetMBA
Updating this previous idea - I held on too long and missed the opportunity to take a 150% gain off the table.. so waiting for the next cycle. POWW reports this week - I have a trigger-sell setup at $4.50 if it crests. The challenge on this one is the recently-proven terrible management. At the 2Q reporting conference call, the CEO announced a plan to split the company into two publicly-traded entities - one for Gunbroker.com and the other for the ammo manufacturing business - but didn't bother to elaborate on either the shares to be traded or any kind of a management team/plan. Naturally, it tanked. Now the CEO has reversed course and canceled his 'plan' -but doesn't instill a lot of confidence of investors - that kind of thing is garage-band hopey/dreamey stuff - not for SEC-reported publicly traded companies.

Nonetheless, there is an incredible continuing demand for ammo with all of the first-time gun buyers, and I expect that will continue more or less indefinitely. POWW's new ammo plant in Wisconsin may/may-not be entirely online yet, but it should be impacting into 3Q numbers with a big impact by 4Q & 1Q2023. I am looking for a 150-250% gain on this one, and I'm sure I'll get it - just not sure which quarter will make it happen.
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