Courtesy of Predator Intelligence.

Investing in Guns

Firearms can be one of the few products available for purchase that do not have a huge depreciation right off the bat. As with anything there is a premium lost from not being the first to take it out of the case and use it, however lightning sometimes strikes and a gun can appreciate over time due to demand and several  circumstances as is the case with cars. This is not the type of investing we are talking about here.
The Ruger American Rifle
There are a couple big names in the industry that are publicly traded companies including Sturm Ruger (RGR) and Smith & Wesson (SWHC) where you can purchase company stock and ride the roller coaster that comes with stock values. Interestingly these are just about your only choices if you are looking to invest on a small scale, not counting Taurus which is a Brazilian company on a Brazil exchange, but feel free to do your own analysis if you are a fan.
Many of the popular manufactures like Remington, DPMS, and Bushmaster among others all fall under the Freedom Group umbrella, which is a part of the private investment firm Cerberus Capital Management. If you want to invest with Freedom Group you must have a large sum of money to invest. ┬áThis leaves a few, but very viable options to consider as a “small” investor looking to make some uncomplicated investments.

With a resurgence in gun ownership and soaring sales in a lackluster economy, investing in Ruger or Smith and Wesson can at first glance seem like the right thing to do. However, good investors buy low and sale high, so it can be tough to gauge if these companies may already be overvalued based on those who have already bought in and pumped up the prices. Both of these stocks have some inherent elements for a good investment, but one stands out as a great buy right now.

 

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{ 5 comments… read them below or add one }

Lance June 1, 2012 at 10:37 am

With Remington now making alot of M-4A1s now for the Army investing is a great long term idea.

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straps June 1, 2012 at 4:29 pm

Remington is Freedom Group, which is private equity. If you're not aware of the meaning of this distinction you don't have the juice to get in on any of that action.

Freedom Group owns DPMS and Bushmaster–two brands NOT known for their quality.

This is sort of an article about buying stuff, not stocks. The common thread running through both disciplines (stuff and stocks) is to diversify (meaning you also have to buy a lot), to avoid emotion and to stay well-informed.

People get rich off guns when something good happens accidentally (someone goes broke over-building a mass-produced gun) or when something bad happens accidentally (AW/Handgun legislation, or the frenzy that began in NOV 2008 and has yet to subside).

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Jeff June 1, 2012 at 8:51 pm

I would agree with that…
Even then, the 2008 surge didn't really affect S&W, leading me to believe that they make most of their profits from selling to LEO around the world.

Just my take/unsubstantiated theory: it was probably one of the reasons why their stock quadrupled in the two years following the release of the S&W M&P. LEOs got their hands on their orders, and the contracts ended, leading to another drop.

Personally, if I HAD to make a choice, I would sell ruger short and hope for the best.

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SFC YOUNG June 1, 2012 at 9:08 pm

I remember when you could buy a .50 semi automatic rifle for just $5,000 and I am not talking about a cheap no name brand either and now they go for over $10,000. That is just over a ten year period. THat is a great return on your money.

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Technoweapon June 2, 2012 at 5:24 am

Investing in guns? As in give yourself another reason to buy more of them? Only this time you have a legit reason that your accountant will understand?

Brilliant!

I can see it now… Checking up on stocks and values of Gold, Oil, Silver, Dollar, Euro, Pound Sterling, Guns.

Admit it. You'd invest in guns only to sell them later at a higher price to buy more guns. LOL

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