Gun Stocks are on the Rise for the First Time Since 2016


Gun makers in America have been struggling over the past couple of years as major manufacturers have seen their shares decline since the election of Donald Trump.

However, as political uncertainty in the U.S. grows amidst the possibility of a Democratic victory in 2020, gun purchases have been increasing as stocks of gun makers are showing signs of a comeback according to The Wall Street Journal.

American Outdoor Brands Corp (NASDAQ: AOBC) , owner of Smith & Wesson, saw it’s shares shoot up by 3.3 percent on Thursday, the third consecutive day of gains for the company which ended the day at $9.44 per share.

Reporting their Q4 financial results on Wednesday, CEO James Debney went on to say that they are optimistic about the future demand for firearms despite what was previously a relatively weak year for firearm demand.

 “Fiscal 2019 was a year that presented challenges for the firearms industry, including changes in the political environment and reduced consumer demand for firearms and for the accessories that are attached to them, such as lights, lasers, and scopes. Despite that backdrop, we delivered year over year growth in revenue and gross margin, and we believe we gained market share,” said Debney.

Other gun makers, such as Sturm, Ruger & Company (NYSE: RGR) also climbed up by almost a percent, while Vista Outdoor Inc (NYSE: VSTO) gained around 1.7 percent. The latter of the two companies happens to be the biggest ammunition producer in sales in the country but has recently put up its gun business for sale.

Gun stocks might not be the most exciting investment choices for investors and traders alike, but the heavily political nature of firearm ownership in America means that profit opportunities often arise around the time of presidential elections.

Should a Democratic presidential contender come into the oval office or even just gain traction in the polls, the worries over tighter regulations will likely send gun stocks surging as gun enthusiasts stock up while they can before the regulatory landscape changes.

In contrast, the election of Donald Trump caught gun makers off guard. Sales of firearms were soaring as most pundits expected a Clinton Presidency. When this turned out not to be the case, the firearms industry was sitting on a large number of unsold wares that it has still been struggling to sell off.

Since 2016, American Outdoor’s stock has fallen by 66 percent since the day before the federal election. Other companies such as Vista have fallen by 78 percent, while Sturm, Ruger & Co avoided most of this falloff, declining only 8 percent.

American Outdoor Brands Company Profile

American Outdoor Brands Corp is a manufacturer of firearms. It is a manufacturer, designer, and provider of consumer products for the shooting, hunting, and rugged outdoor enthusiast. The company manufactures handguns, modern sporting rifles, and handcuffs in the United States.

It is also an active participant in the hunting rifle and suppressor markets. The group also provides shooting, hunting, and rugged outdoor products and accessories, including knives and cutting tools, sighting lasers, shooting supplies, tree saws, and survival gear.

It has two reporting segments: Firearms which includes the firearms and manufacturing services divisions and Outdoor Products and Accessories which includes the outdoor products and accessories and electro-optics divisions. – Warrior Trading News