Call it a sign of the times, the economy or the power of the NRA. But gun sales are surging. And it’s due in some substantial part to the fact that women are buying more and more of them, according to CNBC (http://www.cnbc.com/id/47032016). So much so that gun retailers and gun ranges are starting to hold “Ladies Nights” and include pink targets to take away the intimidation factor for women, the story notes.
Today, nearly 47 more women are shooting guns than a decade ago and a 2011 Gallup poll found that 23 percent of women in America now own at least one gun. A Tulsa, OK gun club says enrollment is up 400 percent in a “conceal-carry class” for women, according to the story.
Of course the story sights other factors in the growth of gun sales. The fear of President Obama winning another term and then pushing for gun control, and people just feeling unsafe, which may be tied to the economy.
Whatever the reason, the surge in gun sales has led to a surge in valuations of gun manufacturers, particularly since the start of 2012. That may be good news for smallcap investors, because some of the bigger gun names are owned by smallcap companies.
Southport, CT-based Sturm, Ruger & C0. (NYSE: RGR, http://www.ruger-firearms.com) has been manufacturing and selling firearms under the Ruger name in the U.S. and through distributorships overseas since 1948. That includes rifles, shotguns, pistols, revolvers and related products. RGR has had a good three-month run: Back in late January the stock was as low as $36.59. On April 18 it closed at $51.46, up $1.44 (up almost 3 percent) on the day. Its market cap is $984 million and 52-week range is $18.65-$53.29.
Springfield, MA-based Smith & Wesson Holding Corp. (Nasdaq: SWHC, http://www.smith-wesson.com) was founded way back in 1852. As you might expect from a holding company, it sells more than firearms (ncluding handguns and rifles) and firearm-related accessories. It sells “perimeter security solutions” including guard booths, inspection systems, mobile barriers, signs and systems, plus much more. On April 12 SWHC unveiled a new polymer pistol, the M&P Shield, “a high performance option” to their line of firearms. SWHC stock has a similar three-month chart as RGR, showing a low of $4.69 back on Jan. 17, then rising to close at $8.05 April 18. Market cap is $522 million and 52-week range is $2.29-$8.60.
Out of our smallcap focus with a market cap of $2.67 billion is Sidney, NE-based Cabelas Inc. (NYSE: CAB, http://www.cabelas.com) has a broader range of hunting, fishing, camping and outdoor-related merchandise. But they do offer Smith & Wesson handguns, as well as Walther pistols. CAB has also enjoyed the run-up in valuation brought on by the recent surge in gun sales. Back in January, CAB was trading for less than $25. It closed April 18 at $39.15, up 2 cents on the day.