Is Smith & Wesson Holding Corp (SWHC) A Buy Following Guidance Drop, Stock Dip?

What have hedge funds been doing with Smith & Wesson Holding Corporation (NASDAQ:SWHC)?

At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long in this stock, a change of +73% from a quarter earlier.

Of the funds tracked by Insider Monkey, Chuck Royce’s Royce & Associates had the number one position in Smith & Wesson Holding Corporation (NASDAQ:SWHC), worth close to $18.9 million, accounting for 0.1% of its total 13F portfolio. The second-largest stake is held by Herring Creek Capital, managed by Steve Galbraith, which held a $15.1 million position; the fund has 3.6% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Steve Cohen’s Point72 Asset Management, Peter S. Park’s Park West Asset Management, and D.E. Shaw, founded by D.E Shaw.

As one would reasonably expect, specific money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, created the most valuable position in Smith & Wesson Holding Corporation (NASDAQ:SWHC). Millennium Management had $4 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $3.3 million position during the quarter. The other funds with brand new SWHC positions are Richard Driehaus’ Driehaus Capital, Josh Goldberg’s G2 Investment Partners Management, and Peter Muller’s PDT Partners.

Taking the very positive hedge fund sentiment into account and the opportunity created by today’s share price drop, we recommend buying Smith & Wesson Holding Corporation (NASDAQ:SWHC).

Disclosure: None