Smith & Wesson Shows US Consumers Consider Guns Good Investment

Sam Mattera

March 09, 2012 2:54 PM

Tickers: SWHC

Volume in the markets has been steadily trending down in recent months, as mutual fund outflows indicate that US investors are looking elsewhere in terms of where to put their money.

That place may be guns and ammunition. On Friday, shares of Smith & Wesson (NASDAQ: SWHC) Corporation rallied over 20% on upbeat earnings.

The company reported earnings on Thursday that were far above expectations, delivering earnings per share of $0.08 when analysts had only been expecting half that. Revenue was also a beat, as the company reported $98.1 million in revenue against an estimated $95.24 million.

Shares have more than doubled since November.

While shares of the gun manufacturer are far removed from 2007 (when the company was trading around $20 per share) gun sales are on the rise.

Gun sales have steadily increased in the wake of the 2008 financial collapse. Membership in the National Rifle Association has also increased, and hundreds of thousands of new concealed carry permits have been issued around the country.

This has lead some sarcastically to question whether the reelection of President Barack Obama should actually be welcome by gun supporters.

At any rate, if economic uncertainty continues to persist, Smith & Wesson could continue to see strong sales.

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