Smith and Wesson is one of the most popular gun brands in the world, and for decades, the company that made those guns had that brand as its corporate name. Yet along the way, Smith and Wesson made strategic acquisitions and developed ancillary parts of its business, and that has led the company to make a lot more than just guns. In response to this changed focus, Smith and Wesson is now known as American Outdoor Brands (NASDAQ:AOBC). As the company goes forward, investors want to know whether Smith and Wesson is making a smart move or whether it's distancing itself from its best-known product line at a time when the American political climate is near its most favorable for gun owners. Let's look more closely at how the stock has performed over time and whether American Outdoor Brands will successfully carry the Smith and Wesson tradition into the future.

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What Smith and Wesson's past says about the company today

Longtime investors in Smith and Wesson have reaped the rewards of the gunmaker's success, but they've had to be resolute in order to enjoy them. Beginning in 2005, the stock went on a roughly three-year run that lifted the shares tenfold, as concerns arose about whether tighter gun control laws might restrict the rights of gun owners to purchase new weapons. That led to a dramatic upsurge in demand. But as gun sales fell back from those levels during the recession, the stock price receded as well.

The stock has shown similar behavior since then. After tragic events involving mass shootings at several places, calls for greater gun control measures get louder, and sales of guns get a temporary uptick. Yet when any subsequent regulatory measures prove to be less stringent than feared, gun stocks have typically given up considerable ground. The latest example of this phenomenon came in the 2016 election, in which many feared that Democratic candidate Hillary Clinton would win and usher in a new era of stringent gun regulation. The election of Republican Donald Trump instead put gun owners at ease and lessened the urgency for them to accelerate gun purchases.

Smith and Wesson gun.

Image source: American Outdoor Brands.

How Smith and Wesson evolved into American Outdoor Brands

As an effort to cut out some of its volatility and to have broader appreciation for the other products that it makes, Smith and Wesson decided in 2016 to change its name to American Outdoor Brands. The move reflects a fundamental change away from relying entirely on gun sales toward having a broader product line for outdoors enthusiasts of all kinds.

To be fair, American Outdoor Brands is true to its roots, noting that it is "proud to deliver some of the most popular consumer names in shooting, hunting, and the rugged outdoors." Yet the Massachusetts-based company celebrates a number of brands that have uses beyond shooting and hunting. For instance, the Hooyman premium tree saw brand offers ways to trim and clear brush, making it useful not just for hunters seeking to clear a shooting lane but also for typical homeowners doing law work. Similarly, optical instruments that gun owners use as sights can also be used for wildlife viewing, and flashlights that hunters use in low-light conditions are also valuable in a wide range of non-hunting situations.

How American Outdoor Brands has fared since the switch

So far, shares under the American Outdoor Brands era haven't done as well as investors would have liked. What some have called the Trump slump for gun stocks has hit the stock. However, since March, American Outdoor Brands has bounced back in response to signs that background checks for potential gun purchases have been rising from weaker levels earlier in the year.

Still, even with the name change, American Outdoor Brands still relies on guns and gun-related accessories for the bulk of its business, and so it hasn't been able to move itself away from the factors that typically move stocks in its industry. If the company really wants to see its stock move less in lockstep with the prospects for the gun business, American Outdoor Brands will have to move further beyond the Smith and Wesson name and fully embrace a wider range of products that appeal to a broad base of customers.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.