Gun “Super-Owners” Are Firing Up Stocks In This Industry
Investment U | Oct 09, 2016 04:30AM ET
The gun industry praises Obama as “the best gun salesman ever.” Gun enthusiasts have been loading up on guns over the last eight years because out of fear that President Obama would pass stricter laws.
But judging by our latest chart of the week, the gun industry may not be telling the entire story. Sure, Americans have bought a lot of guns since President Obama took office... but the ownership uptrend started long before his presidency.
Over the last two decades, American civilians have been stockpiling guns. And we own a lot more guns than we used to.
A recent study from Harvard University and Northeastern University shows that gun ownership among private citizens jumped 38%, from 192 million in 1994 to 265 million in 2015.
It’s due to a new breed of gun owners - the “super-owner.”
Super-owners own eight or more guns. On average, they own 17 guns each.
And, although they make up just 3% of the population, super-owners own 50% of the country’s guns.
And they’re buying more. The FBI counts nearly 2 million firearm background checks (a proxy for gun sales) initiated in September. That’s 11% more than the previous September.
Investing in gun manufacturers is the easiest way to profit from the arming of America. These companies and their shareholders have enjoyed booming profits all thanks to the rise of the super-owner.
Smith & Wesson Holding Corporation (NASDAQ:SWHC) is one of the most recognizable gun manufacturers, and it’s popular with gun enthusiasts and investors alike.
Smith & Wesson’s sales more than tripled between 2001, when it began trading, and 2007. It went from $70.7 million $236.6 million.
And this year, the company expects to sell $916 million worth of guns.
Smith & Wesson’s stock price has followed its uptick in sales. It rose from $0.18 in 2001 to a high of $28.15 in August 2016... for an astonishing 15,539% gain!
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The industry will lose out when President Obama leaves office, but Smith & Wesson’s sales are projected to climb to $963 million in fiscal 2018. So it doesn’t look like Smith & Wesson will be bucking the trend anytime soon...
Now is a great time to add this gun maker to your portfolio’s arsenal. Its sales and price appreciation prove its recent performance isn’t just a shot in the dark.
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