The sale of guns has been rising on fears that the Biden administration will implement stricter gun laws to address the nation’s gun violence. This, combined with a resurgence in outdoor recreational activities due to declining COVID-19 infections, could keep the demand for guns high in the coming months. So, we think leading players in this sector, Sturm Ruger and Company (RGR), Smith and Wesson Brands (SWBI), and Big 5 Sporting Goods (BGFV), are uniquely positioned to benefit. Let’s take a closer look at these names.Gun stocks have been soaring this year on rising gun sales. Many consumers have been hoarding ammunition in fear of stricter gun laws that might be implemented under the Biden administration. In fact, in April the FBI conducted 3.5 million background checks compared to 2.9 million in the same period last year.
Furthermore, as the COVID-19 mass vaccination drive takes effect, the resumption of outdoor activities, including hunting, have been driving heightened demand for guns.
Given this backdrop, we believe Sturm, Ruger & Company, Inc. (RGR), Smith & Wesson Brands, Inc. (SWBI), and Big 5 Sporting Goods Corporation (BGFV) should see substantial growth in the near term. The shares of these companies have been heading north lately and they may continue doing so in the coming months.