Shares of gun stocks often see strength heading into election cycles, particularly when Republican candidates win or are leading in the polls. Here’s a look back at the returns of major gun stocks after the 2020 election.
What Happened: The 2020 race saw Joe Biden defeat Donald Trump in the presidential election. With Biden winning the presidency, certain sectors were seen as winners and losers based on his election campaign and policies.
One area that saw increased attention was gun stocks, with background checks hitting a record in October 2020 as it was believed Biden could win the 2020 election.
With Biden in office and Congress controlled by the Democratic Party, many expected regulation on guns, background checks and other regulations to impact the firearms industry moving forward.
Many gun stocks saw increases heading into the 2020 election. Here’s a look at what would have happened if investors invested in leading gun stocks after Biden won the 2020 election.
Investing $1,000 in Gun Stocks: While many would expect gun stocks to have outperformed the market since Biden was elected president, that’s not exactly the case.
There are many stocks that are associated with being gun stocks due to their sale of guns, ammunition and hunting supplies. Some are pure plays and others have guns and ammunition as smaller divisions within the company.
Here’s a look at how investments of $1,000 would have performed in various gun stocks from the time Biden won the 2020 election (Nov. 3, 2020) until today (June 8, 2023):
Smith & Wesson Brands SWBI: $867.95, -13.2%
Sturm, Ruger & Company RGR: $1,027.29, +2.7%
Vista Outdoor VSTO: $1,375.72, +37.6%
American Outdoor Brands AOUT: $523.91, -47.6%
Ammo Inc POWW: $894.28, -10.6%
Olin Corporation OLN: $2,845.86, +184.6%
As you can see, the results of the various gun stocks since the time Biden was elected have been mixed. Some of the stocks had gains and others have declined in value since the time of the 2020 election.
Taking the $1,000 and investing in the basket of the six gun stocks listed above would have generated a current value of $1,255.81. This represents a gain of 25.6% since the 2020 election.
For comparison, the S&P 500 Global ETF Trust SPY has posted a return of 25.6% since the 2020 election.
This means investing in the six gun stocks would have generated the same returns as the overall market.
With the 2024 election coming up, gun stocks could once again be highly volatile and react based on which party win the presidency and Congress.
Photo: Created with an image from jlhervàs on Flickr