What happened

Shares of firearms manufacturer Smith & Wesson Brands (SWBI 1.08%) rallied 22.2% in May, according to data provided by S&P Global Market Intelligence. Worries of new gun-control legislation coupled with couple with political uncertainty and another round of stimulus checks has created the perfect storm of fresh demand.

So what

To be fair, lucky timing had at least something to do with last month's big gain. Shares were sliding lower as April came to a close. Ripe for a rebound, news that the company is divesting its Thompson/Center Arms division to focus on Smith & Wesson brands posted on the first day of the following month re-established a rally that first materialized in December.

Still, the stock's rise mostly reflects a much bigger trend.

Rising bar chart being drawn on a chalkboard.

Image source: Getty Images.

Temporarily stymied by production bottlenecks linked to the coronavirus contagion, the gun industry recovering...in spades. Consulting firm Small Arms Analytics & Forecasting reports a record-breaking 23 million firearms were sold to United States consumers last year, yet sales have continued to soar through 2021 so far.

And Smith & Wesson is doing more than its fair share of this business. For the fiscal third-quarter stretch ending in January, the company reports $257.6 million in revenue, more than doubling its year-ago top line. Adjusted operating income of $80.5 million soared from the year-earlier figure of $13.7 million. Analysts expect that growth pace to have cooled for the fourth fiscal quarter ending in April -- to be reported on June 17 -- before contracting in the coming year. Shares have continued to tack on gains since the end of last month, though, suggesting investors aren't so sure a dramatic headwind is beginning to blow.

Now what

Firearms are an incredibly cyclical business, although this cycle isn't linked to the economy. The cycle is tethered to the never-ending political rhetoric, which can spur a frenzy of demand when consumers fear new laws may make ownership more difficult, followed by a lull in demand when gun ownership laws remain unchanged. It's likely Smith & Wesson's coming year won't be anywhere nearly as fruitful as the now-ended one has been.

Nevertheless, priced at only 10 times the coming year's projected per-share profits, this stock is a bargain for investors willing to own a firearms maker. Though its business ebbs and flows in the short run, it's done nothing but deliver long-term growth since Saf-T-Hammer took control of the company back in 2001; it has steered the brand successfully ever since.