Best of the Week
Most Popular
1.Trump Delirium Triggers Stock Market Brexit Upwards Crash Towards Dow 20,000! - Nadeem_Walayat
2.The Future Price Of Gold Will Drop Below $1000 In 2017 -InvestingHaven
3.May Never Get Another Opportunity to Buy Gold at this Level Again - Chris_Vermeulen
4.Delirium - The Real Reason Why Donald Trump Won the US Presidential Election - Nadeem_Walayat
5.Why Nate Silver / Fivethirtyeight is one of the Most Reliable Election Forecasting Indicator? - Nadeem_Walayat
6.Gold Price Forecast: Nasty Naughty November Gold Price Trend - I_M_Vronsky
7.Gold Mining Stocks Screaming Buy! Q3’16 Fundamentals - Zeal_LLC
8.Delirium of Trump Mania Win's Mr BrExit US Presidential Election 2016 - Nadeem_Walayat
9.The War On Cash Goes Nuclear In India, Australia and Across The World - Jeff_Berwick
10.Hidden Signs for Gold and Silver - P_Radomski_CFA
Last 7 days
Gold, Currencies and Markets Critical 61.8% Retracements - 2nd Dec 16
Gold Junior Stocks Q3’16 Fundamentals - 2nd Dec 16
Adventures in Castro’s Cuba - 2nd Dec 16
We Are Putting Off the Inevitable - 2nd Dec 16
Macroeconomic Cycles & Demographics - A Fuse, An Explosive and The Igniting Catalyst - 2nd Dec 16
How Moving Averages Can Identify a Trade - 1st Dec 16
Silver Prices and Interest Rates - 1st Dec 16
America, is it Finally time for us to say Goodbye? - 1st Dec 16
Blockchain Technology – What Is It and How Will It Change Your Life? - 1st Dec 16
Burn the Flags, Can Trump Salvage The Sinking US Economic Ship? - 1st Dec 16
Will US Housing Real Estate Market Tank in 2017? - 1st Dec 16
Referendum Puts Italy's Government to the Test - 30th Nov 16
Why We Haven’t Seen Gold Price Rally after Trump Victory - 30th Nov 16
Breakdown and Slide in Crude Oil Price - 30th Nov 16
A 'Wicked Rally' in Gold Price Predicted - 30th Nov 16
Silver Market Sentiment Looks Golden - 30th Nov 16
Indian Demonetization Denotes Severe Stress in the Global Gold Market - 30th Nov 16
Owning Gold and Silver in Troubling Times - 29th Nov 16
Trump's Presidency - Stock Market Crash or Start of New Mega-Trends - 29th Nov 16
Prime Minister Modi's War Against Corruption, Black Money and Fake Currency Notes in India - 29th Nov 16
Can President Trump Really Drain the Swamp? - 29th Nov 16
President Trump’s Economic Plan Isn’t Going to Work - 29th Nov 16
The US Bond Bear Market Has Begun! - 29th Nov 16
Simple Yet Powerful Technical Trading Tools - 28th Nov 16
Public Infrastructure – Welcome to the World of Waste, Fraud, and Abuse - 28th Nov 16
Fifty Years Later, Moore's Computing Law Holds - 28th Nov 16
An Elusive Stock Market Top - 28th Nov 16
This Past Week in Gold - 27th Nov 16
Italian Bank Collapse European Sovereign Bond Carnage, Criss-Crossed Fuses & Lit Bonfire - 27th Nov 16
How to Beat UK Savings Crisis with Child Junior Cash ISA, Pension's and Life-time ISA - 27th Nov 16
Castro Was Not Who You Thought He Was - 27th Nov 16
Understanding the Trump Presidency , Beyond Merkel - 26th Nov 16
US Stocks Bull Market New All Time Highs - 26th Nov 16
Silver Mining Stocks Q3 2016 Fundamentals - 26th Nov 16
MSM's Stock Market Druck'n Suck-In Continues - 26th Nov 16
Gold Price Down 13.5% In 13 Days - Opportunity For Geometric Price Cost Averaging - 26th Nov 16
Tips for Trading Options with Elliott Waves - 26th Nov 16
Germany Pulls the Plug on Market Oracle site for 24 hours, German Election BrExit GerExit Warning Shot? - 26th Nov 16
New NS&I 2.2% Savings Bond Ahead of 2017 Stealth Inflation Theft of Purchasing Power - 24th Nov 16
Establishment Controlled Mainstream Media Launches War on Alternative 'Fake' News - 24th Nov 16
Black Friday Cheap Christmas Lights, How Long do they Last ? B&M Stores Review Video - 24th Nov 16
War On Cash Goes Global – India and Citibank In Australia - 24th Nov 16
Stocks, the Politically-Driven S.O.D. to Lose Again - 24th Nov 16
One of the best buying opportunities in history? - 24th Nov 16
Gold and Monetary Populism: The Oligarchs’ Mortal Enemies – The Peoples’ Salvation - 23rd Nov 16
The Winners and Losers of a Global Trade War - 23rd Nov 16
Why Mexico’s Oil Reform Is A Huge Opportunity For Investors - 23rd Nov 16
Silver and Gold - We Can’t Understand It for Them - 23rd Nov 16
A Review of Nedbank Private Wealth - 23rd Nov 16
Trump’s Financial Revolution! - 22nd Nov 16
Stock Market New All Tiime Highs & the Election Buried This HUGE Story - 22nd Nov 16
Will Crude Oil Price Rally to $50? - 22nd Nov 16
The Spreading Bondfire And The Rising Price Of Gold - 22nd Nov 16
Did The 'Trump Tantrum' Just Trigger The Next US Recession? - 22nd Nov 16
Cheap Money to Continue Flowing & Helicopter Money to Start after 2017 Market Crash - 22nd Nov 16
Gold Price Forecast: Nasty Naughty November Gold Price Trend - 22nd Nov 16
Stocks and Deby - Will Trump Bring Morning or Mourning in America? - 22nd Nov 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

$10000 Gold

Election Politics and Economic Uncertainty Means It's Boom Times for Gun Stocks

Companies / Investing 2012 Apr 11, 2012 - 06:31 AM GMT

By: Money_Morning

Companies

Best Financial Markets Analysis ArticleDon Miller writes: The gun business is booming.

Uncertainty about the upcoming election and a sluggish economy has Americans buying guns and ammo by the truck load.

In fact, business is so good they can't make enough of the stuff.


Even though actual sales data is hard to come by, the industry's biggest players are saying business has never been so good.

Gun stocks are up big as a result.

"Many indicators, including a record-setting 2011, show the firearms industry continues to thrive in a down economy and that the potential exists for another strong sales year in 2012," the National Shooting Sports Foundation (NSSF) said at its annual trade show.

The NSSF said that 920,840 instant criminal background checks were made in January, an unprecedented 20th-straight month of year-over-year increases. The January number comes on the heels of nearly 1.5 million checks in December -- the most ever for any month.

The actual number of guns sold is often much higher, as private transfers and sales from gun shows are exempt from background checks.
In fact, one major manufacturer reported that business is too good.

Sturm, Ruger & Co. (NYSE: RGR) said it received orders for more than one million units in the first quarter, forcing the company to stop accepting new orders.

"Despite the company's continuing successful efforts to increase production rates, the incoming order rate exceeds our capacity...consequently, the company has temporarily suspended the acceptance of new orders," CEO Michael O. Fifer said in a statement.

Here's what's fueling the feeding frenzy in firearms...

In good times and bad, sales of firearms have proven steady and relatively immune to the economic cycles that trouble other industries.

But nothing fuels gun sales like uncertainty, and nothing fuels uncertainty like an election--- especially one that puts a Democrat in the White House.

Whether that's rational or not, firearm sales increased dramatically in the wake of the financial crisis in 2008 and as Barack Obama took office in 2009.

"People were rushing out to buy guns, because they were worried [President Obama] was going to take their guns away," William J. Vizzard, professor of criminal justice at California State University told the Huffington Post. "He didn't have a single proposal on the table for gun laws. It defies reason. It's a culture unto itself."

Now, Americans are once again scrambling to buy guns on fears that the president will be reelected. They reason that as a second-term president, he will be free to impose new restrictions on firearms without having to worry about getting re-elected.

In fact, according to National Rifle Association (NRA) President Wayne LaPierre, the administration's policies are "part of a massive Obama conspiracy to deceive voters and hide his true intentions to destroy the Second Amendment during his second term."

For decades, the NRA has been beating the drum of individual gun ownership as a sacred part of American freedom, wielding its power in Washington to beat back proposed restrictions on the right to bear arms.

The general state of the economy is also helping to boost gun stocks.

Americans are constantly bombarded with media reports of doomsday scenarios, dollar devaluation and economic chaos.

Many take this end-of-the-world scenario very seriously, and are arming themselves to the teeth to protect themselves.

"Indicators reveal growing interest among citizens, particularly women, in owning a firearm for personal and home protection," the NSSF noted in its statement.

Investing in Gun Stocks (RGR, SWHC)
With customer demand exploding, the firearms market represents a tantalizing opportunity for investors.

Unlike many industries where a handful of major players dominate, the industry is composed of about 300 companies with combined annual revenue of about $6 billion.

"If you put the whole industry together, you still wouldn't have one Fortune 500 company," said David Kopel, an analyst at the Cato Institute.
But two of the most recognized names -- Sturm, Ruger and Smith & Wesson Holding Corp. (NASDAQ: SWHC) - might be worth a look.

Both are pure plays on the business of manufacturing firearms and ammunition. Both are considered small caps, with a total valuation under $1 billion.

And both have seen their stock prices soar recently. Over the past 12 months, SWHC's stock price is up a whopping 132% while RGR has posted a 123% increase.

That has catapulted Smith & Wesson to a sky-high P/E of 126, and 5 times book value.

Meanwhile, Ruger is trading at a more reasonable, but still expensive P/E of 24.

In other words, you might want to wait for the market to correct a bit before plunging in.

But companies like Smith & Wesson and Ruger are still in the bullseye of gun demand.

Election-year politics and an uncertain economy could make it a memorable year for gun owners and gun stock investors alike.

Source :http://moneymorning.com/2012/04/11/investing-in-guns-stocks-boom-times-for-sturm-ruger-rgr-and-smith-wesson-swhc/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife