Arming Your Portfolio For Gun Legislation

Tickers in this article: CAB DKS RGR SWHC TASR

Signs of short-sighted profit

Gains in the gun industry won't last forever. Moral outrage can always alter American tastes. States are already contemplating extra sales taxes on guns to curtail purchases. If changes become permanent,  TASER International ( TASR) has a place for investors looking at alternatives. TASER is the clear monopoly in its field (it d evelops, manufactures, and sells electronic control devices (ECD) for use in the law enforcement, military, corrections, private security, and personal defense markets) despite  almost no EPS growth and serial lawsuits.

Investors looking to diversify might want to capitalize on sporting goods retailers that carry hunting equipment and gun sport accessories (namely ammunition). Dicks Sporting Goods ( DKS) and Cabelas ( CAB) are both trading up as go-to hunting supply stores. 

 

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Recent headlines include a move by the Chicago Teachers' Pension Fund to drop its investments in RGR and SWHC. Exodus en masse by investors voting with their money could negatively impact gun stocks.  Finally, financial statements from gun manufacturers make special note that recent performance is tied closely with the current political environment. 

The list average 1-year return for the 5 stocks mentioned in this artice is 68%. 

Written by Kapitall's Freda Ding