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.

How Hedge Funds Traded Firearms Stocks in Q2

Page 1 of 2

With the U.S. election rapidly approaching, investor interest in firearm stocks is arguably higher than it has been in a long time. If Hillary Clinton should win come November, existing gun-laws might be tightened, while the opposite will likely happen if Donald Trump becomes the next President. In either case, firearm stocks will likely move in one direction or another on the news.

Given the impending catalyst ahead, Insider Monkey has put together a list of some of the smart money’s favorite firearm stocks. Without further elaboration, let’s analyze Sturm, Ruger & Company (NYSE:RGR), Vista Outdoor Inc (NYSE:VSTO), Smith & Wesson Holding Corp (NASDAQ:SWHC), TASER International, Inc. (NASDAQ:TASR), and Cabelas Inc (NYSE:CAB) and the associated hedge fund movement in the five stocks during the second quarter.

Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).

taser, tazer, gun, law, police, less, weapon, enforcement, cop, lethal, control, electrocute, sheriff

Kbiros/Shutterstock.com

#5 TASER International, Inc. (NASDAQ:TASR)

– Number of Hedge Fund Shareholders (as of June 30): 10
– Total Value of Hedge Funds’ Holdings (as of June 30): $54.85 million
– Hedge Funds’ Holdings as Percent of Float (as of June 30): 4.20%

As a whole, hedge funds weren’t as enthusiastic about TASER International, Inc. (NASDAQ:TASR) as they were on some of the other firearms stocks on our list. According to our data culled from 749 hedge funds that filed 13Fs for the latest quarter, ten owned shares of TASER at the end of the second quarter, down by one from the previous quarter. Collectively, those funds’ share ownership accounted for 4.2% of the float at the end of June, compared to nearly 18% of the float that is on borrow by bearish investors as of the most recent short reporting period. One reason for the skepticism could be Taser’s rather high forward P/E of 57.75. Richard Driehaus‘ Driehaus Capital raised its stake in TASER by 152% during the June quarter, to just under 300,000 shares.

Follow Taser International Inc (NASDAQ:TASR)
Trade (NASDAQ:TASR) Now!

#4 Sturm, Ruger & Company (NYSE:RGR)

– Number of Hedge Fund Shareholders (as of June 30): 16
– Total Value of Hedge Funds’ Holdings (as of June 30): $76.39 million
– Hedge Funds’ Holdings as Percent of Float (as of June 30): 6.30%

Hedge funds were cautiously optimistic on Sturm, Ruger & Company (NYSE:RGR) from April 1 to June 30, as the number of funds that we track with holdings in the company fell stood at 16 at the end of June, down by one over the quarter. The gun manufacturer reported solid second quarter earnings of $1.22 per share on sales of $167.94 million. Analysts were expecting $0.07 per share and $3.64 million less, respectively. Revenue rose by 19.2% year-over-year, driven by strong demand for new firearms. Sturm, Ruger & Company currently pays an annual dividend of $1.96 per share, good for a 3.39% yield.

Follow Sturm Ruger & Co Inc (NYSE:RGR)
Trade (NYSE:RGR) Now!

Hedge funds’ three favorite firearms stocks are revealed and discussed on the next page.

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...
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 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!