Trump’s big blast victory results in misfire for gun stocks as of late
Fear of an all-out attack on the Second Amendment during the most recent Election Cycle drove handgun sales to record heights — a phenomenon we see in our Scarce Resources investment theme, not necessarily our Safety & Security theme. The conventional thought is now that the Republican, gun-friendly party has control of all three branches of government, that the heat will be turned down on gun sales. We’ll see Thursday afternoon when Smith & Wesson Holding Corp (SWHC) reports third quarter results. From our thematic perspective, the underlying consumer mindset driving our
From our thematic perspective, the underlying consumer mindset driving the thesis behind the Safety & Security theme is still alive and strong and is reflected in SWHC’s move to rebrand and change its ticker to reflect its more diversified business model to deliver customers the products they are seeking.
American’s affection for guns is stronger than ever. The same can’t be said for gun stocks.Donald Trump’s election victory surprisingly hasn’t stopped gun enthusiasts from stocking up yet. More background checks for gun transactions were processed on Black Friday than any other single day, according to the Federal Bureau of Investigation. Its data set goes back nearly two decades. But that doesn’t change what is likely going to be more difficult times ahead for gun makers, including Smith & Wesson Holding Corp.The nation’s largest gun maker by sales is set to report fiscal second-quarter earnings on Thursday. Results should be strong, continuing a string of impressive quarterly performances. Analysts forecast earnings for the period ended in October of 57 cents a share, up from 25 cents a year earlier. Revenue is expected to have more than doubled to $228 million. The stock is prone to sharp post-results moves, including several double-digit percentage swings in recent years.
