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Is It the Right Time to Invest in Firearms?

The unfathomable tragedy that took place at Sandy Hook Elementary in Newtown, Conn., has led to a major shift in public opinion on gun control legislation. It has also had a significant impact on firearm companies such as Smith & Wesson (NASDAQ: SWHC  ) and Sturm, Ruger (NYSE: RGR  ) , which had already been slumping this month. While no additional gun control legislation is currently on the table in the U.S. Congress, if the assault weapons ban that was in effect from 1994 to 2004 were to be reinstated, it would significantly hurt revenue for these companies even further. In the following video, Motley Fool consumer goods analyst Blake Bos tells us whether investors should steer clear of this industry, or whether this low represents a lot of potential upside in the future.

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Read/Post Comments (2) | Recommend This Article (1)

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  • Report this Comment On December 29, 2012, at 8:24 AM, equalforce wrote:

    I am a legal gun owner who submitted to background checks, completed the appropriate training, and take gun ownership seriously. As law-abiding citizens we are expected to navigate the labyrinth of conflicting state laws regarding firearms and we do successfully everyday. Although many of these laws are conflicting between neighboring states, we still respect them and abide by them everyday. Let’s make it easy for everyone (including David Gregory) and develop a basic framework across the United States.

    With 300 million firearms in private hands (one-third of them pistols), the overwhelming majority of gun owners ARE responsible, law-abiding citizens, which is why these horrific massacres are not commonplace, but rather horrific outliers that can never be legislated away (e.g. DC, Chicago, and “Gun Free Zones”).

    For several examples for the recent use of firearms for defensive purposes not typically reported by the national media please visit: please forward this address to others to whom this information may be useful. @forceequalizer

  • Report this Comment On December 31, 2012, at 6:26 PM, garnman wrote:

    The opening statement "major shift in public opinion" caught my eye. I have to say based on speaking with people I meet everyday, that this is not the case where I live. The overwhelming majority here (Michigan) views this heinous event (Newtown) for what it is. ...... The evil act of a detached and deranged mad man that has little to nothing to do with firearms per se'.

    While the main stream media blathers profusely about "gun control" and banning certain weapons, it would seem that most Americans have the mental capacity to realize this supposed cure for the problem will do next to nothing.

    Indeed, it is readily apparent from the activity at the local gun shop that firearms buying is being driven to a new fever pitch. They are sold out of nearly all ammunition and all traces of M-4 style rifles have disappeared from the shelves and gun racks.

    There is a large majority of persons here in the US that want and create huge demand for firearms and they are not going to go away.

    Here's hoping that some semblance of rational and logical thought invades Washington DC and the politicians do not start a civil war over this issue.

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SWHC $25.90 Up +0.17 +0.66%
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Sturm, Ruger and C… CAPS Rating: ****