Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

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

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

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 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!