The demand for Ammunition such as guns is on a rise since the murder of African-American George Floyd.
2020 has been an extraordinary year, full of surprises and uncertainties. The COVID-19 pandemic wasn’t enough as the killing of 46 years African-American George Floyd took place on May 25, 2020. Since then, there has been civil unrest in the US. On top of that, about a month ago, Trump enthusiast marched outside the White House protesting against the unfair elections.
During this period of agitation, the demand for ammunition increased and the sales for guns were on a rise. As a result, U.S.-listed gun and ammunition stocks outperformed the broader market. The demand has continued since and the ammunition stocks have rallied over time. Here are the three top ammunition stocks to buy this year.
Smith & Wesson Brands (SWBI)
Smith & Wesson Brands (SWBI) is one of the most renowned names in the ammunition industry. Since dropping to the lows of $4.42 in March last year, SWBI shares have skyrocketed to a high of $23.57 in January 2021.
With the recent pullback to $16.77, as of Feb. 2, SWBI stock has an upside amid the high demand for guns in the market. The demand for guns spiked during the second quarter last year, with sales more than doubled year-over-year. In Q4 2020, the company reported consumer demand for firearms increased dramatically. The revenue was up by 37% YoY to $193 million.
The growing demand keeps the analyst on the bullish side. Wall Street is quite optimistic as SWBI approaches its next earnings report date. According to Street, the company is projected to report earnings of $0.82, a whopping growth of 530.77% YoY. While the Zacks predict the net sales to top $264.70 million, almost a 58.80% increase from the prior-year period.
Ammo (POWW) is an emerging ammunition company that has had an astonishing period recently. The company with a small market cap of 331.783 million is growing well. The rising demand for ammunition in the US has helped the stock price touch its all-time high earlier this year.
The company has provided its fourth-quarter outlook, which reflects phenomenal revenue growth of 317% YoY. This would be the fourth consecutive quarter with triple-digit growth year-over-year—for Ammo.
As we head forward, the company anticipates ammunition demand to increase further. Based on the recent US senate election, Ammo believes that the demand for ammunition would continue to spike amid the political uncertainty. So, it’s a promising ammunition stock to buy this year.
Olin Corp. (OLN)
Olin Corp. (OLN) is a chemical industry stalwart but it plays a major role in the firearms industry. As an investor, you would not want to roll out OLN stock for a potential investment option this year.
Olin shares are once again popping up signaling to cross the 52-week high. The company recently posted the Q4 results which were decent considering the pandemic. Olin’s revenue soared over 19% to $1,654.1 million during the quarter; surpassing the consensus estimate of $1,460.6 million.
The Zacks consensus estimate for this year’s earnings has increased more than 100% over the last 60 days. However, in the recent quarter, Olin posted a loss of $0.21 compared to $0.49 in the same period last year.
However, the current consensus shows that due to the higher demand for ammunition and better business circumstances than earlier 2020, Olin has more upside. So, keep Olin Corp. (OLN) in your books.