Is It Too Late To Get On The Gun Stock Train?

Smith & Wesson Holding Corp SWHC is absolutely booming after Thursday's big beat and record sales. The stock is up more than 20 percent year-to-date and 6 percent on Friday alone.

This success, and the success of peer Sturm, Ruger & Company RGR both follow President Barack Obama's address to the nation early December, subsequent earnings beats and newsworthy gun purchases by the public.

Obama, San Bernardino And Weapons Stocks

Following the devastating San Bernardino terrorist attack, President Obama publicly spoke out for more stringent gun control laws, implying, according to some, that the POTUS would utilize his executive authority before his term in office concludes.

However, the public statement likely backfired on the president, as it has wont to do, and gun sales skyrocketed to all-time highs at the end of 2015 into early 2016. "The greatest irony of the Obama administration," explained Gun Mag Senior Editor Dave Workman back in 2014, "is the one industry that he may not have really liked to see healthy has become the healthiest in the United States."

Related Link: Gun Stocks Continue To Rise: Thanks, Obama

Since the San Bernardino massacre and Obama's speech, gun-related stocks began to climb significantly, with Smith & Wesson hitting a new 52-week high and Sturm, Ruger & Company up more than 10 percent just days after Obama's address.

That trend has continued into 2016, with Sturm, Ruger & Company's stock up 35 percent over the one-year period, and up almost 24 percent year-to-date. Smith & Wesson is up 87 percent over the past year, and over 21 percent year-to-date.

Analyst Sentiment

Analysts for their part are broadly optimistic on Smith & Wesson.

• Societe Generale (March 4) maintains Neutral rating
• Wedbush (January 6) downgraded to Neutral
• BB&T Capital (January 5) upgraded to Buy
• RBC Capital (December 9) downgraded to Sector Perform
• Wunderlich (August 28) maintained Buy
• CRT Capital (March 2015) maintained Buy
• Dougherty & Company (January 2015) upgraded to Neutral

According to MarketWatch, the average recommendation for Smith & Wesson is Buy with an average price target of $27.29.

For Sturm, Ruger & Company, the average recommendation on the Street is a Buy rating with a target price of $74.00.