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Did Sandy Hook Spell Doomsday for Smith & Wesson?

By Rich Smith - Dec 21, 2012 at 5:45PM

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Investors are selling off shares of gunmakers left and right ... but they're all wrong.

In the wake of last week's shootings at Sandy Hook Elementary School, investors are selling off shares of gunmakers Smith & Wesson (SWBI 0.35%) and Sturm, Ruger (RGR 0.25%). Guns and ammo retailers aren't faring much better, as shares of sporting-goods chains Cabela's (CAB) and Dick's (DKS -1.17%) continue to slide, while Wal-Mart (WMT 0.52%) -- 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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Stocks Mentioned

Smith & Wesson Brands, Inc. Stock Quote
Smith & Wesson Brands, Inc.
SWBI
$14.37 (0.35%) $0.05
Sturm, Ruger & Company, Inc. Stock Quote
Sturm, Ruger & Company, Inc.
RGR
$64.76 (0.25%) $0.16
Cabela's Incorporated Stock Quote
Cabela's Incorporated
CAB
Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$124.77 (0.52%) $0.65
Dick's Sporting Goods, Inc. Stock Quote
Dick's Sporting Goods, Inc.
DKS
$79.66 (-1.17%) $0.94

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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