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Did Sandy Hook Spell Doomsday for Smith & Wesson?

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In the wake of last week's shootings at Sandy Hook Elementary School, investors are selling off shares of gunmakers Smith & Wesson (NASDAQ: SWHC  ) and Sturm, Ruger (NYSE: RGR  ) . Guns and ammo retailers aren't faring much better, as shares of sporting-goods chains Cabela's (NYSE: CAB  ) and Dick's (NYSE: DKS  ) continue to slide, while Wal-Mart (NYSE: WMT  ) -- long known among shooting enthusiasts for having some of the best prices on ammunition around -- are suffering as well.

With Congress moving swiftly to write new regulations for gun sales and ownership, this all seems a logical reaction to the headline news. Yet at the same time as investors rush to sell their shares, gun buyers are rushing to buy firearms -- before any new laws hit the books. Could it be that investors are missing a golden opportunity to "get greedy when others are fearful"?

Fool contributor Rich Smith thinks so, as he explains in today's video.


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  • Report this Comment On December 21, 2012, at 9:47 PM, epeon wrote:

    YES! When RGR dropped to 40.60, I took a large position. I wrote a covered call for 45.5 for January at .95. Buying opportunity.

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Rich Smith
TMFDitty

I like things that go "boom." Sonic or otherwise, that means I tend to gravitate towards defense and aerospace stocks. But to tell the truth, over the course of a dozen years writing for The Motley Fool, I have covered -- and continue to cover -- everything from retailers to consumer goods stocks, and from tech to banks to insurers as well. Follow me on Twitter or Facebook for the most important developments in defense & aerospace news, and other great stories besides.

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Related Tickers

5/2/2016 4:03 PM
CAB $53.60 Up +1.45 +2.78%
Cabela's, Inc. CAPS Rating: ****
DKS $47.89 Up +1.55 +3.34%
Dick's Sporting Go… CAPS Rating: ***
RGR $67.54 Up +3.51 +5.48%
Sturm, Ruger & Com… CAPS Rating: ****
SWHC $22.84 Up +1.01 +4.63%
Smith & Wesson Hol… CAPS Rating: ****
WMT $67.59 Up +0.72 +1.08%
Wal-Mart Stores CAPS Rating: ***