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NAT’L – GUN POLITICS – 4 Stocks That Won’t Get Crushed Again if President Trump Wins Reelection

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. 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 little movement on the legislative front. Individuals no longer saw the need to rush out and buy a gun before they were banned, and adjusted FBI background checks data on potential gun buyers that had risen to a record 15.7 million in 2016 tumbled 11% the following year. Even with rising rates over the past year or so, background checks last year were still down more than 25% from those highs. This year, the same sort of dynamic is playing out. There have already been more background checks on gun buyers done in just nine months of 2020 than were performed in all of 2019, and they’re running 42% ahead of the pace set in 2016 at the same period. Although polling data once again has Trump trailing his rival by a substantial margin heading into the election, the gun industry aftermath won’t be the same if he pulls another upset victory.  [full article]

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