In this article, we discuss the 10 best gun stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Gun Stocks to Buy Now.
The gun and firearms market in the US is thriving, presenting a solid investment opportunity. According to the National Sports Shooting Foundation (NSSF), gun sales in the United States increased 13% year on year to 5.5 million units in the first three months of 2021, as mentioned in recent news. Despite the Biden administration’s campaign for more extensive gun control, gun sales soared to new highs in March 2021, when the third round of federal stimulus money was disbursed to most Americans.
In 2020, the firearm and ammunition industry contributed $63.49 billion to the US economy, according to the Firearm and Ammunition Business Economic Impact Report by the NSSF. Among the leading gun industry players are Sturm, Ruger & Company, Inc. (NYSE: RGR), Smith & Wesson Brands, Inc. (NASDAQ: SWBI), Olin Corporation (NYSE: OLN), and Vista Outdoor Inc. (NYSE: VSTO), to name a few.
Iconic gun companies such as Massachusetts-based Smith & Wesson Brands, Inc. (NASDAQ: SWBI) saw fiscal 2021 fourth-quarter revenue grow 67.3% year over year to $322.9 million. The need for personal protection was one of the growth factors that drove gun sales during the pandemic, helping boost Smith & Wesson Brands, Inc.’s (NASDAQ: SWBI) full-year revenue to $1.1 billion.
Meanwhile, Wellesley economist Phillip Levine stated that widespread national debate over the need for prohibitions to limit gun access would likely drive gun purchases in 2021. According to a market forecast published by Fortune Business Insights, the global gun and accessories industry will grow at a compound annual growth rate (CAGR) of 6.15%, from $6.14 billion in 2019 to $9.33 billion in 2027.
Our Methodology
Insider Monkey tracks the data of about 873 hedge funds, and we have used this data to pick the best gun stocks to buy now. We also considered the fundamentals and prospects for the growth of these stocks based on key business characteristics. We also looked at analyst ratings to see whether stocks have a good reputation among analysts and investors.
Why pay attention to hedge fund sentiment while choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Let’s look at the 10 best gun stocks to buy now.
Best Gun Stocks To Buy Now
10. National Presto Industries, Inc. (NYSE: NPK)
Number of Hedge Fund Holders: 6
We start our list of the 10 best gun stocks to buy now with home appliance and defense products retailer National Presto Industries, Inc. (NYSE: NPK). The Wisconsin-based houseware retailer also manufactures and sells 40mm ammunition, booster pellets, and medium caliber cartridge cases. National Presto Industries, Inc. (NYSE: NPK) owns defense subsidiaries namely National Defense Corporation and AMTEC Corporation, which supplies ammunition and grenade products to the Department of Defense.
On April 1, AMTEC Corporation was awarded a $102.1 million option prize for high-velocity training cartridges under year five of the company’s current five-year 40mm systems contract with the Army. Shares of National Presto Industries, Inc. (NYSE: NPK) jumped 2% in the past day.
The company has a market cap of $602 million. In the second quarter of 2021, National Presto Industries, Inc. (NYSE: NPK) reported an EPS of $1.32. The company’s second-quarter revenue came in at $87.1 million.
At the end of the second quarter of 2021, 6 hedge funds in the database of Insider Monkey held stakes worth $70.3 million in National Presto Industries, Inc. (NYSE: NPK), down from 9 in the previous quarter worth $72.2 million.
Just like Sturm, Ruger & Company, Inc. (NYSE: RGR), Smith & Wesson Brands, Inc. (NASDAQ: SWBI), Olin Corporation (NYSE: OLN), and Vista Outdoor Inc. (NYSE: VSTO), National Presto Industries, Inc. (NYSE: NPK) is one of the best gun stocks to buy now, according to market analysts.
9. AMMO, Inc. (NASDAQ: POWW)
Number of Hedge Fund Holders: 9
AMMO, Inc. (NASDAQ: POWW) is an ammunition manufacturer that ranks 9th on the list of 10 best gun stocks to buy now. The Arizona-based ammo company sells a variety of self-defense, hunting, military, and law enforcement ammunition. AMMO, Inc. (NASDAQ: POWW) also operates an online firearms marketplace, GunBroker.com.
In June, the US Department of Defense granted AMMO, Inc. (NASDAQ: POWW) a contract to supply Ballistically Matched Multi-Purpose Rounds (BM-MPR) for US military use. The stock gained 4.24% in the preceding month and had a year-to-date gain of 124%.
On August 17, Lake Street analyst Mark Smith maintained a Buy rating on AMMO, Inc. (NASDAQ: POWW) and raised its price target to $12 per share from $11, highlighting the company’s newly acquired e-commerce arm, GunBroker.com, in its Q1 2022 earnings.
After the firm posted a solid Q1 fiscal 2022 earnings with an EPS of $0.08, topping estimates by $0.01, shares of AMMO, Inc. (NASDAQ: POWW) rose 3% after trading hours on August 16. The company’s first-quarter revenue came in at $44.5 million, an increase of 360% year over year, and beat revenue estimates by $0.45 million. AMMO, Inc. (NASDAQ: POWW) raised revenue forecast for fiscal 2022 to $210 million from $190 million previously.
At the end of the second quarter of 2021, 9 hedge funds in the database of Insider Monkey held stakes worth $11.3 million in AMMO, Inc. (NASDAQ: POWW), up from 7 in the previous quarter worth $5.71 million.
Just like Sturm, Ruger & Company, Inc. (NYSE: RGR), Smith & Wesson Brands, Inc. (NASDAQ: SWBI), Olin Corporation (NYSE: OLN), and Vista Outdoor Inc. (NYSE: VSTO), AMMO, Inc. (NASDAQ: POWW) is one of the best gun stocks to buy now, according to market analysts.
8. American Outdoor Brands, Inc. (NASDAQ: AOUT)
Number of Hedge Fund Holders: 16
American Outdoor Brands, Inc. (NASDAQ: AOUT) sells shooting, hunting, and camping products, and it ranks 8th on the list of 10 best gun stocks to buy now. American Outdoor Brands, Inc. (NASDAQ: AOUT) is a retailer of gun cleaning supplies, shooting accessories, airsoft guns, pellet guns, paintball guns, weapon lights, tactical scopes, and gunsmithing tools. The Missouri-based outdoor products firm markets its 20-owned brands through traditional sales channels and e-commerce platforms.
On July 17, following the company’s strong Q4 results fueled by higher demand for outdoor activity and shooting sports products, B. Riley analyst Eric Wold maintained a Buy rating on American Outdoor Brands, Inc. (NASDAQ: AOUT) and increased its price target to $46 per share from $44 previously.
The company has a market cap of $371 million. American Outdoor Brands, Inc. (NASDAQ: AOUT) posted its fourth-quarter results on July 15, wherein the company reported an EPS of $0.34, beating estimates by $0.11. The company’s fourth-quarter revenue grew 49.6% year over year to $64.5 million. Meanwhile, American Outdoor Brands, Inc. (NASDAQ: AOUT) recorded full-year net sales of $276.7 million in 2021, up 65.3% year over year. The stock has gained 55% year to date.
At the end of the second quarter of 2021, 16 hedge funds in the database of Insider Monkey held stakes worth $78.3 million in American Outdoor Brands, Inc. (NASDAQ: AOUT), the same as in the previous quarter worth $50.2 million.
Just like Sturm, Ruger & Company, Inc. (NYSE: RGR), Smith & Wesson Brands, Inc. (NASDAQ: SWBI), Olin Corporation (NYSE: OLN), and Vista Outdoor Inc. (NYSE: VSTO), American Outdoor Brands, Inc. (NASDAQ: AOUT) is one of the best gun stocks to buy now, according to market analysts.
In its Q2 2021 investor letter, Maran Capital Management mentioned American Outdoor Brands, Inc. (NASDAQ: AOUT) and discussed its stance on the firm. Here is what the fund said:
“We continue to hold core positions in previously disclosed companies (including) American Outdoor Brands (AOUT). Each are asset-light, branded, buy-and-build growth companies operating in various areas of the consumer sector. American Outdoor Brands reported fiscal full-year 2021 results last week. While results were excellent, AOUT’s typically conservative guidance disappointed the market. AOUT’s valuation at sub-7x EBITDA looking forward over the next year remains cheap. The company will end 2022 with well over 25% of the current market cap in net cash if it doesn’t make any acquisitions in the interim.”
7. Clarus Corporation (NASDAQ: CLAR)
Number of Hedge Fund Holders: 17
Clarus Corporation (NASDAQ: CLAR) is a sporting goods firm based in Utah that ranks 7th on the list of 10 best gun stocks to buy now. The company operates two segments, namely Black Diamond and Sierra. The former sells activity-based products for backpacking, mountaineering, and climbing, while the latter manufactures ammunition used in hunting, precision target shooting, and military activities.
Clarus Corporation (NASDAQ: CLAR) currently pays an annualized dividend of $0.10 per share, with a yield of 0.37%. Shares of Clarus Corporation (NASDAQ: CLAR) increased 73% year to date, and the stock has gained 24% in the last three months.
On July 1, Clarus Corporation (NASDAQ: CLAR) completed its $205 million acquisition of Australian automotive roof rack manufacturer Rhino-Rack. On August 3, DA Davidson analyst Linda Bolton Weiser kept a Buy rating on Clarus Corporation (NASDAQ: CLAR) and increased its price target to $36 per share from the previous $31.
The company has a market cap of $901 million. In the second quarter of 2021, Clarus Corporation (NASDAQ: CLAR) reported an EPS of $0.20, beating estimates by $0.01. In the second quarter, the company’s revenue grew 144% year over year to $73.3 million and beat revenue estimates by $9.85 million.
At the end of the second quarter of 2021, 17 hedge funds in the database of Insider Monkey held stakes worth $97.5 million in Clarus Corporation (NASDAQ: CLAR), up from 15 in the previous quarter worth $71.3 million.
Just like Sturm, Ruger & Company, Inc. (NYSE: RGR), Smith & Wesson Brands, Inc. (NASDAQ: SWBI), Olin Corporation (NYSE: OLN), and Vista Outdoor Inc. (NYSE: VSTO), Clarus Corporation (NASDAQ: CLAR) is one of the best gun stocks to buy now, according to market analysts.
In its Q1 2021 investor letter, Maran Capital Management mentioned Clarus Corporation (NASDAQ: CLAR) and discussed its stance on the firm. Here is what the fund said:
“Clarus (CLAR) – As with AOUT, channel checks reveal continued strength across all of Clarus’ segments. Sell side estimates appear too low.”
6. Big 5 Sporting Goods Corporation (NASDAQ: BGFV)
Number of Hedge Fund Holders: 19
Big 5 Sporting Goods Corporation (NASDAQ: BGFV) is a California-based outdoor and athletic equipment retailer and it ranks 6th on the list of 10 best gun stocks to buy now. The company sells sporting arms, firearms, ammunition, and gun cleaning kits from various brands including Savage Arms and Winchester. As of July 2021, Big 5 Sporting Goods Corporation (NASDAQ: BGFV) managed 430 locations in 11 states in the US.
On August 3, Big 5 Sporting Goods Corporation (NASDAQ: BGFV) raised its quarterly dividend by 39% to $0.25 per share, payable on September 15. On August 4, Lake Street analyst Mark Smith maintained a Buy rating on Big 5 Sporting Goods Corporation (NASDAQ: BGFV) and raised its price target from $26 to $31 per share, citing a record quarter following the company’s strong Q2 earnings. Shares of Big 5 Sporting Goods Corporation (NASDAQ: BGFV) climbed 11.22% in the previous month.
The company has a market cap of $533 million. In the second quarter of 2021, Big 5 Sporting Goods Corporation (NASDAQ: BGFV) reported an EPS of $1.63, beating estimates by $0.55. The company’s second-quarter revenue came in at $326.02 million, up from $227.9 million in the same quarter in 2020.
At the end of the second quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $43.2 million in Big 5 Sporting Goods Corporation (NASDAQ: BGFV), up from 14 in the previous quarter worth $27.1 million.
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Disclose. None. 10 Best Gun Stocks to Buy Now is originally published on Insider Monkey.
