Tags: Trump Administration | Democrats 2016 | Donald Trump | GOP2016 | Hillary Clinton | gun | stocks

Gun, Ammo Shareholders 'May Be Silently Rooting' for a Hillary White House

Gun, Ammo Shareholders 'May Be Silently Rooting' for a Hillary White House

By    |   Wednesday, 10 August 2016 09:34 AM


Gun and ammunition stocks apparently defy all the laws of gravity when it comes to investing. So it’s only natural that most shareholders stand to gain the most if their biggest nemesis, Hillary Clinton, wins the White House, experts tell US News.

Negative publicity and threats to a public company's marketability normally decrease its stock value. After violent episodes, gun and ammunition stocks usually spike.

"Gun company stocks correlate negatively to good news and NRA Republicans in office," Sander Read, CEO of Lyons Wealth Management in Orlando, told US News. "So I would say with a (Donald) Trump win: stock sell-off, and with a Hillary (Clinton) win: stock rally. Unfortunately, any time a terrorist or assault weapon violence occurs, stocks rally."

Experts predict at least a short-term rally in gun stocks if there is a Clinton victory.

"In the short term, gun and ammo manufacturers and retailers stand to benefit from tighter gun control laws," Robert R. Johnson, president and CEO of The American College of Financial Services, told US News. "The mere mention of enacting any sort of gun control laws sends gun advocates to retailers selling guns and ammo. These individuals fear that they will be precluded from buying certain types of guns and ammunition once stricter laws are on the books."

"The irony is clear," US News explains.

"A Clinton victory would likely lead to consideration of potential gun control legislation. Thus, even though the preferred candidate of the National Rifle Association is Donald Trump, at least in the short term, stockholders of gun and ammo firms may be silently rooting for a Clinton triumph," Johnson says.


As an example, after the Orlando, Florida, massacre at Pulse nightclub, shares of both Smith & Wesson Holding Corp. (SWHC) and Sturm, Ruger & Co (RGR) rose 10 percent. Ammunition maker Vista Outdoor (VSTO), the specialty chemical company Olin Corp. (OLN) that owns the Winchester gun brand, and sporting and hunting goods retailer Cabela's (CAB) rose as well.


The nation's largest firearms maker is gunning for Hillary Clinton, accusing the Democratic presidential nominee of fighting "lawful commerce" in her push for more restrictions on weapons sales.

"[Clinton is] actively campaigning against the lawful commerce in arms," said Michael Fifer, chief executive officer of Sturm, Ruger, The Guardian reports.

At issue is Clinton's take on the case, District of Columbia vs. Heller, which involved security guard, Dick Heller, who was allowed to carry a gun on the job, but denied a license for it at home because of Washington's handgun ban.

In 2008, the Supreme Court overturned the ban in a 5-4 vote ruling that the Constitution allows for self-defense at home.

But this year, Clinton said the case was "wrongly decided" and that cities and states should be allowed to enact their own gun-safety laws.

"Certainly this is a unique time in our history," Fifer said during a meeting to discuss his company's earnings report.

"Because for the first time ever we have a nominee of a major political party, one with a very real likelihood of winning the presidency, overtly stating that the Supreme Court got it wrong in the Heller case and actively campaigning against the lawful commerce in arms."

USA Today agrees with such a theory and says eight years of threats by President Barack Obama of more stringent gun laws has been a financial windfall for firearms companies.

 

“Having a boogeyman like Obama to frighten your base is great for business. Since he was first elected president, the gun industry has been stoking fears that he'd confiscate guns and do away with the Second Amendment. And the money’s been rolling in faster than you can empty an AR-15 magazine at your nearby firing range,” USA Today reported. 

 

USA Today offered stats that track Obama’s tenure, from the National Sports Shooting Foundation (NSSF), an industry trade group that represents 8,000 gun and ammunition manufacturers and dealers:

  • Gun industry jobs — 166,200 in 2008 to 287,986 in 2015.
  • Gun industry wages — $6.4 billion in 2008 to $14.5 billion in 2015.
  • Gun industry economic impact — $19.1 billion in 2008 to $49.3 billion in 2015. 

“Job growth up 73%. Wages up 127%. Total economic impact up 158%. Thanks, Obama! And that’s peanuts compared with the bonanza that investors have reaped from gun stocks since Nov. 4, 2008. Both Smith & Wesson Holding Corp. and Sturm, Ruger & Co. are up more than 1,000%,” USA Today reported. 

“So you’d have made 10 times your money in Smith & Wesson stock if you had invested eight years ago.”

 

(Newsmax wire services contributed to this report).

 

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Gun and ammunition stocks apparently defy all the laws of gravity when it comes to investing. So it's only natural that most shareholders stand to gain the most if their biggest nemesis, Hillary Clinton, wins the White House, experts tell US News.
gun, stocks, hillary clinton, donald trump
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2016-34-10
Wednesday, 10 August 2016 09:34 AM
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