Take a Shot at These Gun Stocks

There are only two major gun and firearms manufacturers in the United States, one of which is Sturm, Ruger & Co. Inc. (RGR), which trades on the New York Stock Exchange.

This Connecticut based company has been manufacturing rifles, shotguns, pistols, and revolvers since 1948. Some of the positives on this stock:

Although the trailing P/E is 140, the forward P/E is 29.

The stock has a reasonable Price/Sales ratio of 1.45

Quarterly revenue growth year over year is 18.6%

The company has no long term debt

Last month, the company announced a buyback of $20 million of its shares

The company anticipates cutting its payroll by about $3 million this year from its buyouts of approximately 150 employees

The other American gun manufacturer that you can take a shot at is the NASDAQ traded Smith & Wesson Holding Corp. (SWHC), a famous name in firearms which has been around since 1856. The company was founded by Horace Smith and Daniel B. Wesson, after selling out their first company, Volcanic Repeating Arms Company, to Oliver Winchester. The company manufactures and sells revolvers, pistols, rifles, handcuffs, and clothing, and also owns law enforcement training facilities. A few of the positives on this stock:

Although the trailing P/E is 44, the forward P/E is 21.

Quarterly revenue growth year over year is 42.7%

Quarterly earnings growth year over year is 312%

The company recently purchased the Thompson/Center Arms company, which will give it expansion into the hunting rifle and black powder markets

The stock has a Price Earnings Growth Ratio of .72

Disclosure: Author owns RGR.

RGR vs. SWHC 1-yr chart