In God We Trust, In Guns We Invest

March 10, 2009 by  
Filed under Featured

buy-gun-stocks

I can have a gold or silver coin in my pocket. Nice pieces of metal with some utilitarian value if melted. When the SHTF, which will appreciate more, coins or guns and ammo? I suspect a firearm purchased for $800, well taken care of, would appreciate faster than gold if there was civil unrest.

Apparently, firearms aren’t a bad financial investment today, either:

ISTOCKANALYST: …But it doesn’t seem as if law enforcement is interesting in quelling the panic. “Once the economy gets bad, crime always goes up,” a police officer told the St. Pete Times, “People get desperate whenever things are not going the way they feel like they should be going, and they’ll do things they normally wouldn’t do.”

Crime isn’t the only factor driving sales. In several news accounts, gun buyers have said they’re buying now because they fear stricter gun laws are inevitable under the new administration.

we think you should seriously consider firearms. No, we’re not advocating the purchase of guns… Instead, you should check out a couple of small-cap gun makers. These companies have withstood the test of time. Now, they’re enjoying more publicity and rising share prices…

First up is Smith & Wesson Holding Corp. (SWHC: NASDAQ). This company has been making guns longer than any of us have been on the planet. It’s also a trusted brand that has expanded its offerings over the past few years…

After a tumultuous few years, this stock has posted a strong 2009. Shares are up about 80% since Jan.1.

The gun maker has big plans. Smith & Wesson has moved into the rifle market and wants to take full advantage of this expansion. In February, the gun maker announced it plans to nearly double its annual revenue and improve margins and market share over the next few years.

Sturm, Ruger & Co. (RGR: NYSE) shares have enjoyed similar success this year. As of this morning, the stock is up more than 80%. The firearms makers reported huge increases in revenue and backlog during Q4, and several analysts have upgraded this stock to a strong buy.

Ruger stock might even be too hot to handle right now. It’s posted most of its gains in just a few weeks. Short-term technicals show this stock is way overbought, so it might be best to wait for a pullback before jumping in…