Election-Year Fears Drive Gun Sales
What is driving the rising prices of gun-maker equities? Experts say the main factor is fear — Americans are afraid that, if President Obama is re-elected, he will force through tough new gun laws. That, in turn, is driving increased gun sales, which is good for the gun makers. With increased gun sales, revenues are up and profits are up — and that’s what Wall Street likes to see. S&W got a boost recently when a Wedbush stock analyst Rommel Dionisio re-confirmed S&W’s “Outperform” stock rating, and raised the target price from $7.00 to $10.00. Mr. Dioniso explained that gun sales are starting to rise dramatically because Americans are worried that President Obama will tighten gun laws if he earns a second term.

Other Wall Street “experts” are singing the same tune. Writing on the Motley Fool website, Wall Street reporter Bobbie Johnson opined: “The sales of handguns and ammunition has been on the slow rise over the last few years but the last few months have shown much higher sales. Retailers say it’s due to the upcoming presidential election while others speculate that it is simply the massive uncertainty rippling across our country and others. The industry saw an uptick in sales in the months prior to President Obama’s election in 2008 which was based on the presumption of tougher gun regulations. The general consensus is that more regulations will come into play should the President be re-elected.”

Is Ruger still a good investment, or has all the money already been made? We caution any potential investor that “what goes up must come down”. Still, Ruger has solid fundamentals and the company has made some smart decisions, moving into the concealed, carry gun market with huge success.

Motley Fool Takes Close Look At Sturm, Ruger & Co.
On July 30th, The Motley Fool, a popular investing website, spotlighted Sturm, Ruger & Co., analyzing the company’s performance over the last few years. Motley Fool noted that Ruger has zero debt, has shown 5-year dividend growth of 26.3%, and has delivered a 15% return on equity — all good things. On the other hand, Motley Fool was disappointed with Ruger’s slim 3.7% revenue growth over the past 12 months. But there are positive signs. Last week, Ruger issued a quarterly earning report showing a 32% jump in net income. Overall, The Motley Fool concluded: “Sturm, Ruger hasn’t grown as much as investors would like to see. But with a reasonable valuation, a decent and growing dividend, and good prospects for the future, Sturm, Ruger could get a lot closer to the 10 ring at some point.”

READ FULL STORY: The Motley Fool Analysis of Sturm, Ruger & Co.