Because Trump wants to reverse Obama’s anti-gun executive orders, gun ownership is likely to increase, and gun silencer purchases are likely to explode.
While all of these laws may have an effect on the gun industry, it’s this last one that might have the most visible effect on publicly traded gun businesses. American Outdoor Brands(NASDAQ:AOBC), the company formerly known as Smith & Wesson, sells handguns with specially threaded barrels to accept suppressors, for example, and could enjoy greater sales of such products if silencers become easier to buy. Rival Sturm, Ruger(NYSE:RGR) actually makes and sells suppressors.
Now consider that as of the last report, Americans owned 265 million guns — but fewer than 1 million silencers. That’s a huge market that American Outdoor Brands and Sturm, Ruger would love to sell into. Easing restrictions on silencer sales could have follow-on effects, too. Granting easier access to suppressors could reduce noise complaints at open-air shooting ranges, making it easier for such businesses to open, which would attract more customers, resulting in more ammunition being used, resulting in more ammunition being sold, resulting in more sales (and profits) for ammo makers such as Olin Corp(NYSE:OLN), Vista Outdoor(NYSE:VSTO), and Orbital ATK(NYSE:OA).
Long story short, any relaxation in America’s gun laws under a Trump Presidency would be good news for the gun industry — but easing restrictions on silencer sales could give the NRA the biggest bang for its campaign contribution bucks.
If you do invest, remember you don’t need to sell the minute you hear bad news. For example, I bought Apple at $100, then it dipped down to $90, now it’s selling for $120. If you’re well diversified, and you can wait a year to sell your stocks (or longer), that’s a good idea.
Or what you can do is buy dividend-paying stocks, there are mutual-funds full of those, so you don’t even have to bother choosing the stocks, they do it for you and you get a cut every month.