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Khane

Khane

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Defunding police departments probably doesn't help the forecast for gun manufacturing
 
Frenzied Wombat

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Khane said:
Defunding police departments probably doesn't help the forecast for gun manufacturing
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Akshually, I would postulate that the uptick in people buying guns specifically because of "defund the police" narratives far exceeds whatever potential loss in firearm sales to the police.

I mean, that's literally my impetus for now buying more guns, and I assume also the reason why literally everything is sold out everywhere, and fucking used guns are now selling for more online than their new counterparts.
 
Khane

Khane

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I'm sure that's true that more civilians are buying but I seriously doubt it eclipses potential sales losses to police departments
 
Frenzied Wombat

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Khane said:
I'm sure that's true that more civilians are buying but I seriously doubt it eclipses potential sales losses to police departments
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I'm sure some analyst out there has some geeky financial model for this, but there are 680,000 police officers in the United States, and three million more firearms were sold just this Spring vs last year to civs. I guess the question is what % of that total police force buys new weapons each year, how that compares to the uptick in civilian purchases, and how long each scenario will persist. All I know is that it seems like every firearm maker can't keep up with demand, which to me typically indicates that business is good, and when business is good stock should go up unless there's serious mismanagement.
 
Khane

Khane

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It's an interesting topic because stocks arent necessarily married to reality. If the market feels the future is shaky sales may not matter much outside of earnings report season
 
Sanrith Descartes

Sanrith Descartes

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While I agree with looking at variables like Coronachan on gun sales, what else you have to look at is are the gun companies good companies to own from a financial fundamentals perspective. Historically the answer is no.
 
Khane

Khane

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Especially in an election year where the wrong party getting the presidency can throw everything into question
 
Araysar

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Frenzied Wombat said:
What's the consensus on gun stocks? Considering they can't seem to keep up with demand, you'd think this would be a key sector to target, yet they seem to have taken a beating in the last month or so.
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Theres only 2 publicly traded companies: Ruger and S&W and they both suck for any kind of real growth. They can't even beat most NASDAQ companies in 2020 when the demand for their product is at an all time high. Its always been like this.

the 5 year high/low on Ruger is $40-$90 for example

I owned their shares for a year back in mid 2010s - i barely made enough to go out to dinner when i finally got rid of them
 
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Frenzied Wombat

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Khane said:
Especially in an election year where the wrong party getting the presidency can throw everything into question
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Yeah, imho this has a lot more traction to it than the police defunding angle. Biden winning is sure to tank gun stocks. In fact, I may have to start thinking of dumping my Aerospace and Defense ETF which already took a fucking beating in 2020.
 
Kuro

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Shouldn't a defense industry ETF spike if Biden gets into office? Trump's been all about getting out of wars, establishment Rs and Ds are all about using them as welfare for engineers.
 
Frenzied Wombat

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Kuro said:
Shouldn't a defense industry ETF spike if Biden gets into office? Trump's been all about getting out of wars, establishment Rs and Ds are all about using them as welfare for engineers.
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Well, Trump increased spending, specifically to refurb our gear and increase R&D, while Biden wants to cut funding. Trump doesn't want to get in wars, but he wants the toys. Biden would put the money towards LGBT/welfare programs in the military, and less into gear, but he's probably more likely to get us into a situation where we actually have to ship missiles and ammo abroad to deal with whatever shitshow he gets us into.
 
Sanrith Descartes

Sanrith Descartes

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Defense stocks are defensive by nature (pardon the pun). They usually make tons of cash, pay decent dividends, dont have a lot of stock price appreciation and their customer base tends to be the US govt and our approved allies. In my opinion they provide a nice hedge with tech stocks. They all have nice moats and little competition. The MIC has such leverage in Congress that they aren't impacted "to a large degree" by the Presidentcy. Their friends in Congress make sure they stay fed via defense appropriations bills.
 
Sanrith Descartes

Sanrith Descartes

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Futures are flying. Why you ask?

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Big Phoenix

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I don't think so? Sounds like $30 billion of that $40 billion is going to be in the form of stock.
 
Sanrith Descartes

Sanrith Descartes

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Now ask yourself this... Softbank was playing options-o-rama with Big Tech. Now wonder if they were playing options on NVDA stock. While negotiating a deal to sell an asset to NVDA. Im not saying anything shady happened, but that sure does sound shady. Like I wonder if they unwound all of their NVDA position (if they had one) or if they benefit from this price jump because they still hold options in NVDA.
 
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