Ammo shortage: some insight from an investor.

[Brettly1961]

A couple of newsworthy items to watch are announcements from Vista Outdoors NYSE:VSTO

Vista owns Olin,Federal and quite a few more Ammo Brands. They are the largest ammo maker in the US. Their atock fell, as did all September 3. & 4th making it a good buy at $18.33. It is expected to go as high as $27.00 by the end of the year.

https://seekingalpha.com/market-news/on-the-move

Secondly and more importantly is Smith and Wesson. Who reported September 4 2020 that 2019 guns sales through August 2019 were $128 Billion.
Smith and Wesson’s sales ending for August 2020 were $278 Billion. More than double last year. So that is where all the ammo went. Plus us hoarders.

https://www.shootingillustrated.com/articles/2020/8/20/ammo-shortage-may-last-until-2021/

https://www.thestreet.com/investing/smith-wesson-swbi-stock-earnings-gun-sales


It’sjust some interesting data points, but what do I know? This is not professional stock advice. Just observations.

Happy Labor Day!

Brett

 

[BillsCamino]

Not to mention several ammo factories closed down during early pandemic panic.

 

[Brettly1961]

Very good point. Thanks this is my first time contributing I appreciate the feedback.

 

[spencer60]

Yup, "Seeking Alpha" is a great place to follow the financials of the gun industry.

As mentioned, COVID did disrupt some companies, limiting their production. I heard an interview with on of the Riger VPs talking about how they had to re-plan their production around the 6' rule, which reduced output 20-40%, although they think they will get that back over time.

It probably had a bigger impact on the ammo side, since so much of what we consume here in the US is made overseas, in countries that were under more restrictions than we saw in the US.

 

[BLIP]

Nice snag on the return, you take a look at a couple of ammo factors oh, look at all the new buyers what would the purchase typically?
Precisely a lot of 380 pistols and a lot of 9 mm pistols.
And I'm willing to bet a lot of 22 rifles have been sold...
And with those guns you need new ammo; that would be part 1.
There is the supply and demand...

With recent shutdowns of raw supplies and increase cost and brass I'm willing to bet the manufacturers are probably paying a little bit more at least two smaller ones that don't do projected term purchases...

You see a whole lot of new names popping into the forums that are really trying to push this capitalistic country to its Breaking Point. And that's why a lot of us stick together... I ran out of 9 m m oh, you ran out of 45 oh, I had a lot of 45 and you had a lot of 9 m m so guess what happens...

That's the difference between friends and members.