Weekly Wreck

American Outdoor Brands Corporation - The Stock Exception under a Trump Presidency

As was often noted during the Obama administration, nothing was better for gun sales than having Democrats in office. Unfortunately for gun stock owners, those days are over. With the Republicans in control gun sales are down, way down.

American Outdoor Brands [AOBC], owner of Smith and Wesson is one of those stocks. Additionally, the fact that American Outdoor’s premier gun label, Smith && Wesson was an also-ran in the U.S. Military’s XM17 Modular Handgun System Contract which was won last year by Sig Sauer doesn't help.

While index funds have no choice but to own stocks in their index and tend to be the biggest holders of such stocks, many SRI funds and investors explicitly avoid gun stocks which may also put long-term downward pressure on the stock price of American Outdoor.

With industry sales entering what appears to be at least a four-year downturn, barring an impeachment, of course, don’t be surprised to see consolidation and further retrenchment in this industry. American Outdoor Brands Corporation is but one of these firearms industry losers, currently trading at around $12 compared with nearly $20 at the beginning of 2017.