America loves guns.
And if you’re a sin stocks investor, you should too. And even if you don’t like to shoot things, you should at least love weapon sin stocks.
I could probably stop the blog post there. But I won’t.
How about some proof?
In any industry it’s hard to measure demand but it’s a bit easier in the firearms industry because they can measure the number of background checks… which leads to firearm purchases.
According to this report by Business Insider, February 2015 had the second highest number of background checks (the highest February on record was 2013, and the highest month ever was in December 2012.
A couple of other important facts:
- 20% of gun purchasers is made up new shooters.
- A quarter of survey respondents purchased more than one gun within one year of the purchase of the first gun.
- In a survey on gun ownership, 90% of respondents own more than one gun.
- Nearly two-thirds of the market purchases guns for safety.
- The market of new shooters is getting younger, they’re shooting more often, and women are making up a growing number of shooters.
All of this information is GREAT news for firearm sin stock investors. It means that new purchases today will mean more potential purchases in the years to come (plus a higher need for ammo), and a growing market of shooters.
How To Capitalize On This Opportunity
Although there are many conflict-focused sin stocks that deal in large weapons or military-grade supplies, we pay attention to just two firearm manufacturers: Smith & Wesson Holding Corp (NASDAQ: SWHC) and Sturm, Ruger & Co. Inc. (NYSE: RGR).
As long as two-thirds of buyers purchase a gun for personal safety, and 90% of them buy more than one gun, then we’ve got a pretty cool trend here. The reason is: What drives the need to protect yourself? Bad news and a feeling of being threatened. Now let me ask you this: Do you think that feeling is going to diminish in the near future or increase?
Ummm… as long as there are cutbacks to overworked police departments, and as long as there are people turning to crime because they can get away with it, and as long as jails are overcrowded and the prison system broken anyway, and as long as the news keeps leading with scary headlines, and as long as there are thieves and terrorists on the loose then yes, people will continue feeling the need for safety, which they fulfill with guns.
Check out Smith & Wesson’s stock chart:
And Ruger’s stock chart: