SWBI: Locked and Loaded, heading higherSWBI has a very bullish setup. Wave 2 may need one more leg down sub-$11.50, but it is not required. Appears to be a very high probability double over the next 12 months.
Guns
Do gun stocks benefit from the regulation debate?With every mass shooting incident in the US calls for stricter gun control legislation grow. But paradoxically, mass shootings also lead to a surge in purchases of firearms, as Americans arm up for their own safety and over concerns that certain types of guns may become harder to purchase in the future.
Stockpiling guns and gun stocks
As consumers stockpile firearms in the wake of shooting massacres, investors also pile into stocks of gun manufacturers.
On May 25, the share prices of gun manufacturers shot up after an armed 18-year-old stormed a public elementary school in Uvalde, Texas, shooting dead 19 children and two teachers.
Smith & Wesson (NASDAQ:SWBI) and Vista Outdoor (NYSE:VSTO) jumped 6.9%, Sturm Ruger (NYSE:RGR) rose 4.1%, while American Outdoor Brands (NASDAQ:AOUT) climbed 7% on that day.
Stocks of these companies have also risen since US President Joe Biden took office as tougher gun policies get more attention under Democratic administrations.
“The gun manufacturers have spent two decades aggressively marketing assault weapons which make them the most and largest profit… For God’s sake, we have to have the courage to stand up to the industry,” Biden said in a speech at the White House shortly after the Texas incident.
Loose regulations
Prior to the Uvalde shooting, Texas Republicans have repeatedly loosened curbs on gun sales in recent years, according to local daily The Texas Tribune. In 2021, lawmakers passed a law allowing people to carry handguns without permits, less than two years after mass shootings in El Paso and Odessa in which 30 were killed.
Gun debate drags on
Despite the number of mass shootings (and gun violence in general), Americans and lawmakers remain polarized over gun control laws. Senators recently noted that efforts to pass bipartisan legislation are making progress as Republicans appear to be more amenable to changing the laws.
A recent Reuters/Ipsos poll of 940 people conducted online has found that nearly two-thirds of Americans support moderate or strong curbs on gun ownership, including 53% of Republicans. The poll was conducted a day after the Uvalde shooting.
lets see Civil unrest continues most likelyPeople Will buy guns! Liking the Flag pattern forming looking for some volume next week. should be some protests paid for by big business. look for volume forming on break of flag
Ammo shelves empty saw for myself no ammo anywhere upstate. look out for earnings beat Vista Federal Ammo. pullback enter above MA or swing trade like me. Election Biden win explodes Trump Civil unrest Win Win
sold out everywhere....well this is consolidating nice along moving avg. perfect pullback to enter at high of day next week. though i feel it is a good swing trade rather then momo but can prob. go either way. election Biden win gonna explode trump win civil unrest = Guns and ammo..... Bought long calls into may and might trade
Ammo shelves empty everywherenothing like Riots and election to spark Ammo sales Beat for sure.. Winchester Ammo best...
In times of chaos, prepare for combat...We live in uncertain times. One needs to be protect themselves from threats both foreign and domestic. How to do that? With guns from American Outdoor Brands Corporation of course!
This company has recently double-bottomed and has great EPS, fundamentals, good P/E, ROE, etc. We will buy when price crosses over the 500 MA.
Good buying opportunity on SWHCSWHC climbed quite high in anticipation of a Clinton victory, primarily because gun sales surged as people anticipated a future with tighter gun control.
With that being said Trump is very 2nd amendment friendly, and long term could be great for this stock.
Another key thing to watch out for is an upcoming name change for the company. The companies new name would be "American Outdoor Brands Corp". While it will never have the ring to it like Smith and Wesson will, this name would reflect the companies holdings outside of firearms and could suite the company well.
I'll be watching this stock for a bit. Might go down a bit more this week, but I see a lot of potential here.
