Shares of Smith & Wesson Brands (NASDAQ: SWBI) soared 152% in 2020 as the firearms industry roared back to life and guns started flying off the shelves.
A convergence of events charged individuals into buying more firearms last year. The coronavirus pandemic caused people to worry about what food shortages might mean, which was followed by riots and civil unrest breaking out in numerous major American cities.
Image source: Smith & Wesson Brands.
When politicians began supporting the concept of defunding (if not outright dismantling) local police departments, consumers began to take seriously the need for personal defense. Then the presidential election offered a glimpse of a repeat of the 2016 elections, where one candidate favored greater gun control measures and the other one had a record of protecting the Second Amendment right to keep and bear arms.
SWBI data by YCharts
Smith & Wesson posted fiscal second quarter earnings last month that showed gun sales more than doubled year over year with profit margins rapidly expanding.
President and CEO Mark Smith said it was the iconic gunmaker’s “second consecutive record-breaking quarter” and there doesn’t appear to be any let up in firearms demand.
The FBI had already conducted over 35.7 million background checks on potential gun buyers by the end of November, almost 26% more than all of 2019. Many of the same forces that drove Smith & Wesson Brands higher this year remain in place, giving investors confidence it will continue shooting higher.
10 stocks we like better than Smith & Wesson Brands, Inc.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Fintech Zoom Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Smith & Wesson Brands, Inc. wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of November 20, 2020
Rich Duprey has no position in any of the stocks mentioned. The Fintech Zoom has no position in any of the stocks mentioned. The Fintech Zoom has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.