After the last presidential election, the firearms industry went into a deep three-year slump. Sales cratered and one of the biggest firearms dealers went bankrupt, causing gunmakers like Smith & Wesson Brands (NASDAQ:SWBI) and Sturm, Ruger (NYSE:RGR) to see their stocks take big hits.
Smith & Wesson lost about 75% of its value while Ruger fell about 40%. Leading ammunition manufacturers Vista Outdoor (NYSE:VSTO) and Olin (NYSE:OLN) also saw sales collapse, while Remington Outdoor, which straddled both worlds as a firearms manufacturer and ammo maker, declared bankruptcy twice. The remnants of its business were just auctioned off with Ruger and Vista getting some prime assets.
Now we’re weeks away from the next election, but if President Donald Trump wins again, investors shouldn’t expect a repeat of the last time. There will be no “Trump Slump” and the booming sales we’re seeing now should continue.
Locked and loaded
Four years makes a difference. Back in 2016, the gun industry had worked itself into a frenzy on expectations that then Democratic presidential nominee Hillary Clinton would win the election and enact stricter gun control measures. Firearms dealers loaded up their inventory ahead of time for the crush of gun buyers sure to come.
Trump’s surprise win caught the industry flat-footed as Republican control of Congress and the White House meant there would be