Gunmaker Makes Good on Getting Out of Colorado

Finding friendlier states has become a growing industry trend.

Jan 6, 2014 at 4:02PM

The new year got off to a bang with one of the country's biggest gun magazine manufacturers carrying through on its promise to get out of Dodge. Well, Colorado, actually.



Magpul Industries said it was moving its headquarters to Texas and its production facilities to Wyoming after its home state of Colorado passed new laws limiting the size of a gun's magazine to no more than 15 rounds. It follows the decision by several other industry manufacturers to leave for less hostile states following the passage of restrictive gun laws. PTR Industries moved to South Carolina from Connecticut, Stag Arms is mulling a similar move, and Kahr Firearms Group exited New York for Pennsylvania.

To be sure, the biggest gunmakers haven't packed up their kit yet, but even for those staying put, expansion plans are actively being considered for places other than where they're currently located. Connecticut-based Sturm, Ruger (NYSE:RGR) announced last summer that North Carolina would be home to its first major expansion in 25 years; Remington Arms, which has had a factory in Ilion, N.Y., for more than 200 years, is considering expanding manufacturing facilities in Tennessee; and Beretta stated that although it's not moving out of Maryland anytime soon, if it does expand, it's not going to be somewhere that hasn't "shown consistent, strong support for Second Amendment rights."

Although Texas Gov. Rick Perry made a much-publicized tour of out-of-state gunmakers like Connecticut's Colt and Mossberg facilities, trying to lure them to his state following the passage of tougher gun laws, they don't seem to be going anywhere yet, and Smith & Wesson (NASDAQ:SWHC), which has been in Springfield, Mass., since 1852, similarly says it is staying put.

Of course, it's not so simple for an entrenched manufacturer like Smith & Wesson, Ruger, or Beretta to just pack up and leave, particularly in the midst of overwhelming demand for firearms. While both the FBI and the gunmakers say you can't extrapolate background checks conducted by the police agency as a one-for-one indicator of gun sales, it still provides a high-level view of the interest in buying a weapon.

The number of NICS checks the FBI performed did tail off in the second half of 2013, with six of the last seven months showing lower numbers than the year before, but last year still marked the greatest number of background checks ever conducted, or more than 21 million, a 7.7% increase from 2012.

That's borne out by the results of sporting goods retailers, too, with Dick's Sporting Goods and Cabela's both saying the category's torrid rate of growth has slowed significantly in the back half of the year. Yet the gunmakers still have a big backlog of orders to tide them over, so they're not done yet shooting out the lights, and President Obama's use of executive orders the other day to implement measures surrounding the mentally ill and firearms is going to keep demand at a fever pitch.

The firearms industry has always had a target on its back every time tragedy has struck, but they've now discovered that voting with their feet is an effective way to fight back. Magpul is the second company to abandon Colorado for Wyoming, as gunsight maker HiViz Shooting Systems is leaving Fort Collins for Laramie. With the support they've received from the gun community, it won't be the last time we hear of a manufacturer taking aim at the chance to relocate to more gun-friendly states.

Scoping out the opportunities
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Fool contributor Rich Duprey has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information