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Pure-Play Gun Stocks Explode Amid Obama Town Hall Anticipation

January 4, 2016 12:27 pm
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Pure-Play Gun Stocks Explode Amid Obama Town Hall Anticipation

Smith & Wesson Holding Corp (NASDAQ: SWHC) and Sturm, Ruger & Company (NYSE: RGR) shares are up several percentage points on the first day of 2016 amid anticipation of a Town Hall event on Thursday. Hosted by CNN's Anderson Cooper, the event will be held at George Mason University in Fairfax, Virginia, at 8:00 p.m. ET.

Called "Guns in America," CNN describes the event as Obama's "final pitch to the public" on stricter gun controls.

An upward move in the prices of gun stocks indicates investors are now pricing in — however slightly — an increased likelihood that gun reforms will take effect before the President leaves office in mid-January 2017. Theoretically, this could lead to higher gun sales in the near-term before any such regulation goes into effect.

Diversified Names Still In Red

Of note, Olin Corporation (NYSE: OLN) — where one-third of revenues comes from guns and ammunition-related sales — shares are down slightly on the day. Thus far, only pure plays on the industry are reacting to Obama-related anticipation. Cabelas Inc (NYSE: CAB), though they spiked higher Monday morning, are still in the red.

Smith & Wesson recently traded at $23.03, up 4.7 percent. Sturm, Ruger & Company was up 1.8 percent at $60.86.

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