Nobody has said it in so many words, but we are at the end of the recession. In a time when the economy is going to rise and fall as it stabilizes, it is important to know when a stock is about to falter. Everyone knows the basics. Avoid investing in companies that generate sub par earnings, has weak cash flow, or a less than adequate balance sheet. However, there are other nasty characteristics a stock can hold that will drop it into the toilet in inclement economic weather. Keep an eye out for these other symptoms that show an avalanche ahead.

It is not uncommon for a company to lower their earnings guidance. That can happen for a number of normal reasons that happen in the cycle a company goes through: slightly dropped earnings, a weakened economy, etc. Just make sure that the company in question clears the bar they set in that quarter. Why is that? Of course you’re more worried about the value of the stock than the revenue earned from them. Unfortunately, some shareholders, especially those with controlling interest are so worried about the revenue coming in and the performance of the company that value will go down as people sell for lower and lower prices to get out if they do not have faith in the management of the corporation.

It is also not uncommon for insiders at a company to sell off some shares, especially if life changes they are undertaking require quick funds. Other times, you may be looking at an insider that just wants to make some quick income or diversify their holdings. Sometimes if a bunch of executives all dispense of some of their shares at one time, you are looking at a disastrous future. You begin to wonder, “What do they know that I am not aware of?” Be very wary of executives selling at or near their low points. That tells you the executives think their money is better elsewhere, and yours very well may be too.

Another signal that a stock may be in trouble is when a company abruptly discontinues its guidance toward the investment industry. This may signal that the company has no idea or expectation to have an idea of when earnings could come in. This may also have a minor signal in the way of product or service diversification. The company and its stockholders are in trouble if the company cannot keep up with the accelerating market and/or does not come up with new, innovative products or services to keep up or stay ahead of the industry. You do not want to invest in a company that is “betting all their money on one horse.”

Keep an eye on industry trends as well. Sometimes the nature of the industry at that moment can impact that one company and its competitors at the same time. For instance, General Motors, Chrysler and Ford all came down with the same ‘disease’ at the same time, due to the same debts and the same mistakes. That was the time all GM, Chrysler and Ford stockholders bailed at once, and rightly so. Investors with a sharp eye that receive good, up-to-date news and suggestions from a website like this one may be able to limit or prevent losses just by watching these early signs.

Domestic firearms manufacturer Smith & Wesson reported a fiscal year ending high, above Wall Street expectations and 12 percent higher stock trading than forecast. 2009 Fourth quarter revenue (of a fiscal year that goes April to April) rose 20 percent to $99.5 million. Experts had only predicted an average of $90.8 million.

“Demand for our handguns and tactical rifles remained strong throughout the fourth quarter as evidenced by our revenue as well as out backlog balance,” said a statement released by Smith & Wesson. Their backlog grew to over $200 million that quarter.

Smith & Wesson is a top provider of standard issue firearms to many military and law enforcement teams (reminiscent of “Dirty Harry”, who carried a Smith & Wesson .44 magnum), helping keep sales up, even in the worst of times. Their M&P 40 caliber semiautomatic is named M&P, standing for military and police, for a reason. It is their top sale to law enforcement and the public. As of 2007, 216 police departments had committed to carrying their products standard, according to the company. They hope to further expand these totals as they innovate new, more efficient weapons that showcase their unique style. They offer other types and calibers of semiautomatics, old and contemporary style revolvers, rifles, shotguns, and custom engraved firearms.

Firearms enthusiasts enjoy Smith & Wesson and competitor Winchester because they are some of the best quality domestic firearms. Smith & Wesson also sells better in the southern United States, simply because that is where firearms and second amendment adherence are more prevalent.

Smith & Wesson acquired Thompson/Center firearms in order to branch further into new product lines like long guns, interchangeable barrel single-shot pistols, muzzle loading rifles, and semiautomatic rimfire rifles. Thompson/Center also allows Smith & Wesson to delve into sales of more contemporary style firearms while maintaining their classic style under their name. The acquisition occurred in January of 2007.

To further ensure market domination, they said they are also buying into Franklin, Tennessee-based Universal Safety Response in a deal involving cash and stock worth more than $26 million in order to try to branch out into the perimeter security market. Universal Safety Response is a full-service security integrator and barrier manufacturer and installer, dealing in high end, on site security for businesses and homes.

Smith & Wesson stocks have traded as low as $1.53 and as high as $7.52 over the last year. They are currently holding at $4.93, a decent price in such a volatile market.

YouTube, a Google subsidy, has incurred losses that some analysts may have overblown. Google does not seem to mind the misperception, according to an internet economics study released yesterday.

RampRate Inc. projected a $174.2 million loss by YouTube, a far cry from the $470.6 million loss estimated by Credit Suisse analysts in April. This Credit Suisse research report that became a popular read on Wall Street and the internet. Since Google bought YouTube for $1.76 billion in late 2006, it still has yet to prove it is financially lucrative for Google. It has, ironically, proven financially lucrative for many YouTube users, reminiscent of Chris Crocker (“Leave Britney Alone”), “lonelygirl15” (an international drama sensation) and Brandon Hardesty (the kid with the strange faces and noises in the Geico commercial who has also signed on for several movies).

Google has agreed that YouTube is not profitable, though they have refused to provide any specifics. Google’s CFO, Patrick Pichette, says that estimates by analysts tend to lead to inaccurate conclusions. “Most people build outside views of what it costs us to do things, and often they exaggerate,” Pichette said in an interview with Mclean’s, a Canadian magazine, just after Credit Suisse released their report.

RampRate says that Google does not seem interested in setting the record straight about YouTube’s actual losses. They believe that the enormously high loss perception by analysts helps Google negotiate more favorable contracts with movie, TV and music studios. Copyright owners tend to be less likely to pursue legal options to receive unpaid royalties and damages if they believe YouTube is a debt maker. “Google is no doubt thrilled to let YouTube be known as a financial folly,” RampRate said in their recent report.

YouTube spokesman Aaron Zamost said that Google has been running advertisements around millions of user created videos to lessen YouTube’s losses, though he would not actually comment on RampRate’s report. He also said YouTube shares revenue with its business partners, giving Google little reason to purposefully allow YouTube’s losses to be magnified. “We want our partners to do well, because when they succeed, we succeed,” Zamost said.

The real question is how much it costs Google to run YouTube. 20 hours of video are supported by Google every minute, requiring high numbers of bandwidth and storage space. Credit Suisse, after lots of research and interviews, believes operation costs to be as high as $380 million. RampRate believes it is only $83 million, believing that Google has negotiated lower costs with broadband providers and data movers. RampRate also believes Google has helped keep down YouTube’s costs with their own innovative technology, an idea that Pichette supported when he spoke with Mclean magazine. “When people run models, they generally use standard industry pricing for bandwidth, storage, but we build everything from scratch,” Pichette said in the interview. “So we know our cost position but nobody else does.”