This article looks at the 9 best gun stocks to buy now and provides a detailed overview of the guns and ammunition industry.
Gun Culture in the United States
Civilians can own guns in over 175 countries of the world, albeit with laws and regulations restricting certain firearms. Ten of these countries had enshrined the right to own and bear arms in their constitution at some point in their history. Four still do – the United States, Mexico, Haiti, and Guatemala.
The most notable of these four is the United States. The country has the highest gun ownership in the world, with an estimated 393 million firearms owned by civilians, which translates to 120.5 guns per 100 people in the country, as we mentioned in the article 25 Countries with Highest Gun Ownership in 2024. The number of firearms in the United States outnumbers the country’s overall population. Moreover, despite Americans representing only 5% of the world’s population, the country is home to 40% of the world’s civilian-owned firearms.
The nation has a deep connection to guns, dating back to its earliest days. While there is mixed opinion over the right to own a gun and the laws that regulate its use in modern times, most gun owners consider the weapon an integral part of their freedom. The demand for weapons continues to remain on the higher side, which has given rise to a thriving firearms industry that employs thousands of Americans and generates billions of dollars in tax revenue for the government every year.
Gun and Ammunition Industry
America’s gun market is a significant contributor to the country’s economy. In 2023, the sector was responsible for over $90 billion of all economic output in the United States, according to The Firearm Trade Industry Association. This figure was 12% higher compared to 2022 when the economic activity from guns was valued at $80.7 billion. The industry in recent years has witnessed extraordinary growth, as more Americans choose to exercise their right to own guns, with 4.3 million citizens becoming new gun owners last year alone.
The report further mentioned that the market has created hundreds of thousands of jobs in the United States, directly in the guns and ammunition industry and indirectly in the ancillary and supplier industries. As of last year, 384,437 jobs in the country were tied to the sector, earning nearly $26 billion in combined wages. As a result, companies in the industry and their employees pay over $10 billion in taxes each year to federal and state governments.
Gun sales are soaring in 2024 as well. According to the FBI, an estimated 5.5 million new guns were bought during the first four months of the year. California, Florida, and Texas contributed 22% of all guns purchased during this period. SafeHome.org, a security and safety website, believes the upcoming 2024 presidential election in the US is a factor driving up gun sales in the country with varying opinions on strict gun laws among candidates running for the White House.
Gun stocks surged in July this year after the assassination attempt on presidential candidate, Donald Trump, which increased expectations of his victory. Trump has vowed to protect gun rights and oppose any firearm limits if he is elected this November. The assassination attempt was not the first instance of gun stocks spiking after a security crisis, mass shooting, or civil unrest. The demand for guns and ammunition has seen an uptick every time there has been a law and order incident or a fear that their availability will be limited through strict gun laws.
With that said, let’s now shift focus to some of the best gun stocks to buy now considering the current trends in the industry.
Photo by STNGR Industries on Unsplash
Methodology
We scanned Insider Monkey’s database of 912 hedge funds for the second quarter of 2024 to identify gun and ammunition manufacturing companies. From that list, we picked 9 gun companies with the highest number of hedge funds having stakes in them. The best gun stocks to buy now are ranked in ascending order of hedge fund holders in each company. In the case where two or more stocks were tied on the number of hedge fund holders, we outranked one over the other on market capitalization.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
9 Best Gun Stocks To Buy Now:
9. Big 5 Sporting Goods Corporation (NASDAQ:BGFV)
Number of Hedge Fund Holders: 9
Big 5 Sporting Goods Corporation (NASDAQ:BGFV) is a retailer headquartered in El Segundo, California that deals in sporting goods. The company has over 400 stores across different cities in the United States. Its product mix includes athletic shoes, accessories, apparel, equipment for outdoor activities, team sports, and several other recreational activities. It also sells firearm products for shotgun and rifle services; however, these account for a meager volume of the company’s overall revenue.
During the second quarter of the year, Big 5 Sporting Goods Corporation (NASDAQ:BGFV) posted net sales of $199.8 million, down from $223.6 million during the year prior. The company’s gross profit margin of 29.4% was also lower than in 2023 when it was recorded at 32%. Moreover, it had a net loss of $10 million and a loss per share of $0.46. The volume was substantially higher than in 2023 where it registered an overall loss of $0.3 million during the second quarter and an EPS of -$0.03.
These results were due to a decline in same-store sales, and increased distribution, selling, and administrative expenses. This has led to bearish sentiment around the stock among certain analysts, more so considering that the retail industry as a whole continues to struggle as discretionary spending declines.
On the other hand, the company has attractive price points, according to analysts. The stock is currently trading at $1.89 per share, which could rise if Big 5 Sporting Goods Corporation (NASDAQ:BGFV) manages to capitalize on seasonal sale opportunities this year like fall sports and back-to-school period. The management is also planning to close down 11 stores to cut its costs. According to Insider Monkey’s database, 9 hedge funds tracked by Insider Monkey owned stakes in BFGV at the end of Q2 2024.
8. National Presto Industries, Inc. (NYSE:NPK)
Number of Hedge Fund Holders: 14
National Presto Industries, Inc. (NYSE:NPK), founded in 1905, initially produced pressure canners for home use, before venturing into other cooking appliances and later, defense and safety products. Today, it is divided into three business segments – houseware appliances, defense, and safety. Its defense segment is a major supplier of 40mm ammunition and cartridge cases to the United States Department of Defense (DoD). This year in May, the company announced that it had received a $818.9 million, five-year contract from the U.S. Army for 40mm M918E2 High-Velocity Target Practice cartridges.
It is one of the best gun stocks to buy now, with 14 hedge funds bullish about the company, according to Insider Monkey’s database. During the second quarter of 2024, the company posted an EPS of $0.85, growing 10.4% from last year. Its overall revenue of $85.1 million was also 7.7% higher YoY, driven by a sustained demand for ammunition.
Considering its strong financial performance, there is consensus among analysts about its Buy rating, with an average share price target of $128, which reflects a 69% upside potential from its current share price. Defense sales account for about three-fourths of the company’s overall revenue, and there is good reason to be optimistic about the stock considering the spike in defense spending worldwide amid conflicts in Europe and the Middle East. Another reason to be bullish about National Presto Industries, Inc. (NYSE:NPK) is that it operates in three separate segments; if one market is experiencing a downturn, the other may go up.
7. Sturm, Ruger & Company, Inc. (NYSE:RGR)
Number of Hedge Fund Holders: 14
Sturm, Ruger & Company, Inc. (NYSE:RGR) is an American firearms company that has a diverse portfolio of products, mainly serving three product lines – pistols, rifles, and revolvers. It is among the largest firearm manufacturers in the United States. During the first half of FY24, the company had net sales worth $267.6 million with earnings per share of $0.47. These figures were down from the corresponding period in 2023, when the firearms manufacturer posted revenues of $292.3 million, with EPS of $1.72.
The downturn has been driven by several factors, including a drop in production, increased sales of products with lower gross margins, and unfavorable fixed costs due to a rise in inflation. This has led to a bearish sentiment around the stock among certain analysts and investors.
However, Sturm, Ruger & Company, Inc. (NYSE:RGR) is determined to turn things around and had an improved second quarter compared to the first. During Q2, production increased by 18%. The management believes the increase in output will help the company leverage its problem of fixed costs, and improve margins. The company laid off some of its workforce during the first quarter, which also helped limit some of its fixed costs during the second quarter.
Sturm, Ruger & Company, Inc. (NYSE:RGR) is also popular among investors due to its cash flow generation and short-term investments. The company had a current ratio of 4.8 to 1 at the end of the second quarter and had no debt. Stakeholder equity was measured at $322 million, which reflected a book value of $18.9, of which one-third comprised cash and short-term investments. According to Insider Monkey, 14 hedge funds had stakes in the company during Q2 2024. The stock has an average share target price of $51, representing a 23% upside from its current level.
Sturm, Ruger & Company, Inc. (NYSE:RGR)’s new products are also performing well, accounting for a major share of the company’s overall sales. 32% of all firearm sales of the company in 2024 were of new products launched in the last two years. Increased demand for new, as well as existing products, has also resulted in reduced inventory costs for the company.
6. Smith & Wesson Brands, Inc. (NASDAQ:SWBI)
Number of Hedge Fund Holders: 17
Smith & Wesson Brands, Inc. (NASDAQ:SWBI) is a firearm manufacturing company headquartered in Maryville, Tennessee. The company has been operating since 1852 and is one of the leading manufacturers of long guns, handguns, and other shooting equipment.
The company announced its full-year FY24 results in June, during which it had net sales of $535.8 million, 11.8% higher YoY. GAAP net income for the year was recorded at $39.6 million, up from $36.9 million in 2023. EPS for 2024 was measured at $0.92 compared to $0.94 in the year prior. The strong financial performance was due to an increase in production to meet the demand for both new product offerings and existing core portfolios. A key driver was consumer reception towards the company’s innovation, with new products accounting for around 30% of overall sales.
However, the management at Smith & Wesson Brands, Inc. (NASDAQ:SWBI) anticipated seasonal patterns for firearms to adversely affect sales, as high inflation in the US decreased discretionary consumer spending. Mark Smith, the company’s President and CEO, shared the following remarks in Smith & Wesson Brands, Inc. (NASDAQ:SWBI) Q4 2024 Earnings Call:
We are anticipating a much more competitive marketplace throughout the traditionally slower summer month this year as consumer discretionary spending continues to be impacted by stubborn inflation, as you have likely seen from recent NICS results. This is consistent with normal seasonal patterns for firearms demand, and we do expect offsetting tailwinds during our typical busy season throughout the second half, as the Presidential election campaign activity ramps up in the fall and we benefit from new product introductions and we bring online additional capacity targeted at some of our new products where we are currently constrained. Throughout the slow period this summer, we will be aggressively pursuing market share through promotions and marketing campaigns in addition to building inventory in preparation for the busy fall season and continuing our cadence of new product introductions.
Having said that, the company’s successful new product launches are likely to continue to bolster sales and drive the bullish sentiment around the stock. Smith & Wesson Brands, Inc. (NASDAQ:SWBI) is one of the best gun stocks to buy now with 17 hedge funds in Insider Monkey’s database owning stakes in the company. Street analysts also maintained a Consensus Buy rating on the stock, with an average share price target of $18, representing a 37.4% upside.
5. Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH)
Number of Hedge Fund Holders: 18
Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) is an outdoor sporting goods retailer in the United States, with stores in 29 states across the country. The company sells footwear, apparel, and gear for enthusiasts of shooting, hunting, fishing, camping, and other outdoor activities.
During the first half of the year, the company reported net sales of $532.97 million, down 7.6% compared to the same period last year. During both quarters, Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) also missed its earnings expectations. These results were driven by a drop in store traffic, a decline in demand for products in most categories, and increased expenditures from inventory shrink. As a result, the stock has lost over 31% of its share value during the last 12 months. Company executives are also cautious about results for the back half of the year and have revised their guidance for the full year.
Having said that, there were some positives reported in Q2 2024 for Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) as it ended the quarter with a clean inventory and has vowed to shift focus on strategic investments in core parts of the business that generate a bulk of its sales. Moreover, e-commerce sales were up 3% from last year and comprised 19% of total revenue. Sales in the fishing department continued to grow, and trends improved in the hunting category as well.
Despite the ongoing challenges, Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) is one of the best gun stocks to buy now in the industry. According to Insider Monkey’s database, 18 hedge funds were bullish about the stock at the end of the second quarter this year, up from 17 at the end of Q1. Most analysts agree that the stock is expected to recover once current challenges subside. They hold a consensus Buy rating on the stock, with a price target of $3 per share, suggesting a potential upside of 2.39%.
4. Dick’s Sporting Goods, Inc. (NYSE:DKS)
Number of Hedge Fund Holders: 34
Dick’s Sporting Goods, Inc. (NYSE:DKS) is a Fortune 500 company and the largest sporting goods retailer in the United States, with more than 800 stores across the nation, as of last year. It originally started in 1948 as a fishing gear shop in Binghamton, New York, before venturing into sporting equipment, hunting gear, apparel, and footwear. The company has four subsidiaries – Golf Galaxy, Public Lands, House of Sport, and Going Going Gone.
Dick’s Sporting Goods, Inc. (NYSE:DKS) has been moving away from guns and the hunting department for the last few years. After the 2018 high school shooting in Parkland, Florida, the management decided to stop selling high-capacity magazines and assault rifles like the ones used in the tragic incident. It also announced to set a minimum age of 21 for all gun sales. Over the next two years, Dick’s Sporting Goods, Inc. (NYSE:DKS) removed the hunting department from over 500 stores citing ‘underperformance’.
This year, during the second quarter, the company smashed analysts’ expectations, reporting EPS of $4.37 against anticipation of $3.87. Sales during the quarter totaled just under $3.5 billion, growing 7.8% compared to the second quarter in 2023. Gross profit for the quarter was at $1.28 billion, representing 36.7% of net sales. These strong results in Q2 were driven by growth in all categories, led by footwear and athletic apparel. The company saw more athletes purchase from their stores and digitally, and spend more than they did last year. At the heart of this success was Dick’s Sporting Goods, Inc. (NYSE:DKS)’s Omnichannel athlete experience, which created a seamless buying experience for their customers, including athletes.
After the dominant quarter, the company also raised its full-year Outlook, and now expects its EPS to be in the range of $13.55 to $13.90, up from $13.35 to 13.75 previously. Dick’s Sporting Goods, Inc. (NYSE:DKS) is one of the best gun stocks to buy now, with its share price having increased 47.64% in 2024. There is consensus among analysts on the stock’s Buy rating, with an average share price target of $242 which is 11.7% higher than its current level. According to Insider Monkey, 34 hedge funds were bullish about the stock in Q2 2024.
The bearish sentiment, however, stems from the fact the company went through a calendar shift, which resulted in a benefit of $140 million in sales and $0.45 earnings per share. This is likely to be offset negatively in the second half of the year, mainly during the third quarter.
3. Vista Outdoor Inc. (NYSE:VSTO)
Number of Hedge Fund Holders: 36
Vista Outdoor Inc. (NYSE:VSTO) manufactures and markets sporting and outdoor products through more than three dozen brands under two operating segments: Revelyst and The Kinetic Group. It is one of the best gun stocks to buy now with 36 hedge funds holding stakes in the company at the end of Q2 2024, as per Insider Monkey’s database.
The first-quarter earnings call for FY25 revealed mixed results for Vista Outdoor Inc. (NYSE:VSTO), as overall sales declined 7.1% year-over-year to $644.2 million, while EPS also dipped 6.5% to $1.01 per share. Revenue at The Kinetic Group was reported at $370 million, whereas Revelyst generated $274 million in total revenue. The company faced challenges with the supply chain, timings of new product launches, and increased input costs of essential manufacturing materials.
That said, there are still enough reasons to be bullish on Vista Outdoor Inc. (NYSE:VSTO). The GEAR Up program at Revelyst has already saved $5 million this year, which has put the company on the path to meet the targeted savings of between $25-30 million during FY25. Moreover, its products continue to be recognized. The United States military announced a $3.6 million contract for Vista’s 7.62×51 Long Range ammunition this year. The company’s share price surged by 34.83% so far this year, amid rising bid offers for its acquisition. The stock has a Buy rating, with a share price target of $41.25, representing an upside of 3.46% from its current trading value.
2. Axon Enterprise, Inc. (NASDAQ:AXON)
Number of Hedge Fund Holders: 36
Axon Enterprise, Inc. (NASDAQ:AXON) is an American manufacturer of weapons and technology for law enforcement agencies, military, and civilian use. The company has a diverse product catalog that includes TASER energy weapons, cameras, sensors, and others. It is one of the best gun stocks to buy now, with 36 hedge funds bullish about the company as of Q2 2024 according to Insider Monkey.
The stock has had a tremendous five-year run, during which its share price has grown by a whopping 490%, and revenue has risen 25% or more in each of those five years. The company has been benefitting from strong demand in its TASER segment, tactical acquisitions, and strategic partnerships formed during this period. Axon Enterprise, Inc. (NASDAQ:AXON) had a stellar second quarter of 2024, where it posted a record revenue of over $500 million and booked more than $1 billion in new business. EPS was recorded at $0.526.
Axon Enterprise, Inc. (NASDAQ:AXON) has seen accelerated demand for various products, including Taser 10, Draft One, and Axon Body 4. However, the most notable of these has been Taser 10.
Axon Enterprise, Inc. (NASDAQ:AXON)’s management has expressed concerns about a likely economic downturn coming ahead, but the company at this point seems poised for further growth as demand remains robust. It has raised its full-year outlook and now expects revenue to be between $2.00 billion and $2.05 billion, up from a range of $1.94 billion to $1.99 billion. Another reason for optimism stems from the company’s cloud and services segment, which grew 47% year-over-year during Q2. There is consensus among Street analysts on the stock’s Strong Buy rating.
1. Olin Corporation (NYSE:OLN)
Number of Hedge Fund Holders: 39
Olin Corporation (NYSE:OLN) is an American manufacturer and distributor of ammunition, sodium chloride, and chlorine. Headquartered in Clayton, Missouri, it traces its origin to two companies – Equitable Powder Company and Mathieson Alkali Works – both founded in 1892. The company has three business segments, Chlor Alkali Products, Vinyls, and Winchester, with the latter focused on arms and ammunition.
During the second quarter of the year, the company generated sales worth $1.64 billion, with a net income of $74.2 million, which represented an earnings per share of $0.62. While this met analysts’ expectations, the figures were considerably low year-over-year, with 2023’s net income being $146.9 million and EPS of $1.13. The company has been navigating through several challenges, which has led to its share price drop 20% this year.
Global industrial activity continues to remain slow and subsequently, the demand for American chlorine has still not reached pre-Covid levels. On the other hand, the demand for commercial ammunition at Winchester also remained low and the rise of costs of propellants created a headwind as well. Hurricane Beryl in July this year has also been a huge setback, costing the company around $100 million, which is set to affect results in Q3.
Having said that, Olin Corporation (NYSE:OLN) is determined to adjust to market demand and challenges. It is actively focusing on cost-saving strategies, and as part of that, has already reduced its annual spending plan by $25 million. Moreover, the company has deferred its international tax payment of $80 million to 2025. These measures are likely to help improve cash flow, and the management is optimistic that its end-of-year working capital will be similar to what it was at the end of 2023. Olin Corporation (NYSE:OLN) is also optimistic about military sales considerably increasing during the second half of the ongoing fiscal year.
There is a mix of bearish and bullish opinions on the stock. However, based on Insider Monkey’s database, Olin Corporation (NYSE:OLN) is the best gun stock to buy now with 39 hedge funds owning stakes in the company. There is also a consensus among analysts on the stock’s Buy rating. In August this year, BlackRock Inc. further strengthened the bullish sentiment around the stock after it increased its total holdings in the company by acquiring an additional 333,632 shares, taking its total ownership in Olin Corporation to nearly 12 million shares.
Overall, OLN ranks first among the 9 best gun stocks to buy now. While we acknowledge the potential of gun and ammunition companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than OLN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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