Hot topic, hot industry: firearms.
The call for more gun control laws has consumers stocking up on guns and ammo before new regulations enter the picture.
Bottom line: now is the time to own gun stocks.
Here are the three top names for your portfolio…
Smith & Wesson (SWHC)
The FBI has run more background checks in 2015 than any prior year.
That bodes well for Smith & Wesson (SWHC), which is up nearly 97 percent so far this year.
Those shares are only poised to go higher. While S&W’s profits are currently growing at a low double-digit rate, if gun sales keep thriving, growth can exceed 20%.
Buy Smith & Wesson before that happens. You’ll profit handsomely over the long haul.
Sturm, Ruger (RGR)
Clearly, the place to be invested for an explosion of gun ownership is in the gun manufacturer space.
Like Smith & Wesson, Sturm Ruger (RGR) shares are on a tear—up more than 71 percent so far this year
The company currently trades at a discount to its 52-week high.
Current estimates have the company growing profits next year by just over 10%. Given that shares trade for 19 times 2015 estimated earnings, the stock is expensive.
That’s okay when end demand is poised to rise quickly, which could be on the horizon.
Sportsman’s Warehouse (SPWH)
With gun fever comes ammunition—and lots of it.
Sportsman’s Warehouse (SPWH) makes no bones about its ammunition and gun sales.
Enthusiasts, hobbyists and concerned citizens, alike, are flocking to this outdoor recreation chain for the goods.
Sportsman’s shares have been on a roll in 2015.
Despite the gains, the stock is still cheap.
Analysts have the company growing profits by 27% from the current fiscal year ending January 31, 2016 to the next. At current prices, the stock trades for only 20 current fiscal year estimated earnings.
An uptick in demand due to more individuals arming will be the surprise that can and will send shares of Sportsman’s higher.
This post originally appeared in mainstreetinvestor.com.
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