Americans bought another 19.9 million guns last year.
While that’s down 12.5% year over year, it was still the second highest on record.
According to Forbes, “Observers think politics and CV-19 are key reasons for this surge: The pandemic — and the economic devastation it wrought — fueled safety worries, purchases remained high during summer 2020’s nationwide protests, and sales regularly spike ahead of presidential elections.”
Also, about 30% of guns purchased in 2021 were first time gun owners, according to a survey from the National Shooting Sports Foundation (NSSF).
On top of that, the U.S. is seeing a massive shortage of ammunition.
“The NSSF estimated that 8.7 billion were produced in 2018, a marked increase from the 8.1 billion produced in 2017. Fast forward to a year ago and some 9 billion rounds were produced. That increase should have in theory been more than enough to meet the demand, yet it hasn’t and likely won’t, at least well into next year and perhaps even beyond. Demand for ammunition could likely continue throughout 2022.”
With demand for guns, and an ammunition shortage showing no signs of letting up, some of the top stocks to keep an eye on include:
Vista Outdoor (VSTO)
Oversold, VSTO is up about $1.05 to $35.72.
Most recently, the company reported net income of $118.1 million, or $2 per share, up from $78.9 million, or $1.31 per share. Adjusted EPS of $2.10 beat estimates for $1.92.
“Two years into the pandemic, people continue to find enjoyment in their newly acquired and rediscovered outdoor passions,” said chief Executive Chris Metz, as quoted by MarketWatch. “We continue to see increasing levels of activity and participation across outdoor recreation whether it be golfing, camping, hiking, biking, hunting or recreational shooting.”
The company also authorized a new $200 million share buyback program.
Sturm Ruger & Company Inc. (RGR)
In its most recent earnings report, the company reported net sales of $178.2 million and diluted earnings of $1.98 per share, compared with net sales of $145.7 million and diluted earnings of $1.39 per share in the third quarter of 2020.
For the nine months ended October 2, 2021, net sales were $562.7 million and diluted earnings were $6.64 per share. For the corresponding period in 2020, net sales were $399.6 million and diluted earnings were $3.31 per share.
Smith & Wesson Brands (SWBI)
In its most recent quarter, revenue fell about 7.3% year over year to $230.5 million. Net income came in at $55.3 million, or $1.13 per diluted share, as compared to $52.8 million, or 93 cents per diluted share year over year. In addition, according to CFO Deana McPherson remarked, “We delivered a 370-basis point increase in gross margin that more than offset a 7.3% decrease in revenue compared with the prior year second quarter.”
