Cabelas Inc (CAB), Olin Corporation (OLN): With Obama’s Gun Bill Defeated, Is the Bullet Bubble Dead?

Page 1 of 2

Following a recent string of gun-related tragedies over the past year, few people were surprised by President Obama’s efforts to enact legislation aimed at reforming the nation’s gun laws.

Of course, equally unsurprising was the deep division of opinions regarding both the effectiveness and necessity of such legislation, which included a proposal to ban some semi-automatic weapons resembling military assault rifles. In addition, the bill had also recently introduced a number of amendments, the most significant of which aimed to expand background checks for gun buyers at firearms shows and on the Internet.

As a result, prices for both firearms and ammunition have spiked over the past few months along with demand, as worried consumers began to stockpile the products.

Sporting-goods retailer¬†Cabelas Inc (NYSE:CAB), for instance, noted a 12% year-over-year increase in comparable-store sales last quarter, largely on the heels of a “surge in the sale of firearms and ammunition.” What’s more, the outfitter also stated that more than one in five firearms purchasers last quarter were to brand-new Cabelas Inc (NYSE:CAB) customers, indicating just how many folks came out to buy guns and ammo before any new laws might have made it more difficult.

Meanwhile, Winchester ammunition manufacturer Olin Corporation (NYSE:OLN) has benefited from a relentless upward trend in ammunition purchases, which it says began the Saturday before Election Day. As of the company’s most recent quarterly results, Olin management bluntly stated that the demand has only been “limited by product availability.”

Image Source: Wikimedia Commons.

Sure enough, anyone who’s tried to purchase ammunition recently is well aware of just how hard it is to find and — if you can find it — just how fast prices have risen as a result of the demand. That of course, is why Cabelas Inc (NYSE:CAB) currently offers the following disclaimer on the firearms and ammunition page of its website:

Because of extraordinary demand, Cabelas Inc (NYSE:CAB) complete line of firearm accessories, ammunition, and reloading supplies may not be shown here. Only in-stock items are displayed. Please check back often as our online assortment is frequently updated.¬†Cabela’s is limiting quantities of ammunition and reloading supplies. This limitation, which will be lifted once supply catches up with demand, will provide the best chance for the greatest number of our customers to fulfill their needs.

Investors who played the trend were certainly rewarded for their efforts; check out the performance of Cabelas Inc (NYSE:CAB), Olin Corporation (NYSE:OLN), and gunmaker Sturm, Ruger & Company (NYSE:RGR) from the time Olin Corporation (NYSE:OLN) says the demand spiked until last Wednesday:

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!