It's no secret that gun sellers have experienced a downturn since Donald Trump was elected. According to Stephen Gutowski, Gun Sales Dip in January as Trump Takes Office, citing the comparison of the January 2016 to the January 2017 background checks reported by the FBI. (It was about a 25% drop -- click on thumbnail on the right to see chart.)
Gun manufacturers' stock prices certainly took a nose dive. And maybe it's too early to plunge in after them at this point. But that's an industry to watch. At least one analyst is bucking the trend by tentatively suggesting that Ruger stock is undervalued. That may be true. I'm not smart enough to know.
However, anecdotal evidence suggests that gun sales are still strong. For example, a friend who attended a local gun show over the weekend reported that attendance wasn't that much different from previous shows. They may have just been looky-loos rather than buyers. But there's also this: Strong Attendance at 2017 SHOT Show Provides Positive Outlook for Firearms Industry. Shot Show is an industry trade show, and the optimism of the attendees might just be wishful thinking.
Nevertheless, there's something on the horizon that a lot of potential investors probably haven't considered. That's a new product line that would become possible once silencers are legalized. We talked about the movement to legalize silencers last month. But more recently, the ATF itself issued a White Paper in which they concluded silencers should not be viewed as a threat to public safety.
It will be a while yet before regulations on silencers are relaxed. But if and when that happens, who better to manufacture silencers than the firearm industry?
1:55 PM 2/8/2017