Massachusetts Episcopal Diocese Wants to Influence Smith and Wesson Business Practices

Mass Live has the story here.

Determined to address gun violence from within the firearms industry, the Episcopal Diocese of Western Massachusetts voted last week to buy 200 shares of stock in American Outdoor Brands, the Springfield-based parent company of Smith & Wesson.

“So that we might have a voice at the table and work with some other church groups to see what we can do to lessen the public health crisis of gun violence,” said Bishop Douglas J. Fisher. “It’s born out of frustration.”

Two hundred shares is the minimum number needed to place an initiative question on the ballot before shareholders at American Outdoor Brands' annual meeting.

You may recall that last year a group of nuns was successful in pushing through a shareholder ballot initiative forcing Smith and Wesson to to "give an accounting of how the company monitors gun violence and what it's doing to make safer products and keep firearms away from those who shouldn't own them."  It appears Smith and Wesson might want to consider increasing the minimum number of shares required to put a question on the ballot at a stockholder meeting.  At the current price of American Outdoor Brands (Smith and Wesson's holding company) that amounts to only having to fork over $2600 in order to create mischief.  These people aren't interested in protecting an investment, they want to harm the company and by extension, gun owners.

Gun Control Activists Successful at Smith and Wesson Holding Company Shareholder Meeting

CNBC has the story here.

The maker of Smith & Wesson firearms lost a prolonged fight with religious groups and other shareholders who have been pushing it to consider a plan to help reduce the harmful effects of its products.

The investors, led by The Interfaith Center on Corporate Responsibility, presented a resolution on gun safety at American Outdoor Brand's annual shareholder meeting Tuesday, the same resolution it successfully passed at Sturm Ruger earlier this year. And the preliminary voting showed the shareholders also won this fight.

The proposal calls on American Outdoor Brands, Smith & Wesson's parent company, to put together a report on whether the gun maker is adequately addressing the risks that its products are associated with gun violence and to show evidence it is exploring ways to make safer guns and products to reduce this violence.

The CEO of American Outdoor Brands, James Debney, stated the obvious when he said it was a politically motivated vote. This continues the trend of investor activism against gun manufacturers as liberal organizations like the American Federation of Teachers (AFT), among others, have pushed for gun control and prevent pension funds from investing in firearms manufacturers, especially those that manufacture modern sporting rifles. AFT also backed the Interfaith Center's proposal.

Smith and Wesson is the second firearms manufacturer targeted by Interfaith.  Ruger's shareholders passed a similar proposal in May at their stockholder meeting.

Strong Year for Firearm Manufacturers

This shouldn't be suprising, given the fact firearm sales have reached historic highs.  But some investment managers who talked to ABC News for this story expressed surprise:

Peter Zeuli, CFA, head portfolio manager at Philadelphia Investment Partners, tells ABC News he is surprised how well Ruger, Smith & Wesson and other gun makers have performed. Ruger's earnings he calls consistently strong. He used to own the company's shares, he says, but had sold the stock, in part on expectations that the Obama administration would push through new firearms restrictions. That has not happened.

Most people would probably attribute the manufacturers good fortunes to the fact Obama's gun control push sparked sales to go through the roof.  One portfolio manager had a different explanation:

Randy Bateman, chief investment officer of the Huntington Asset Advisors in Columbus, Ohio, tells ABC News there's another explanation for gun makers' good times: Rural consumers have more money in their pockets. Farm incomes, he says, have risen in the past year. On top of that, hydraulic fracturing in farm states has brought in more money. That, he says, translates into increased sales by gun makes.

Whatever the cause, firearms remain the only industry that has done well in the five years of Obama's economic policies.

Hat tip to The Gun Wire.

Smith & Wesson CEO on Gun Sales

Smith & Wesson CEO Mike Golden appeared last week on CNBC's "Fast Money" to discuss firearm sales and the company's growth in the law enforcement market. He said while the freenzy may be over, sales are still brisk. He also talked about how the company is doing very well in their competition for law enforcement contracts for handguns as well as tactical rifles.



Hat tip to the National Shooting Sports Foundation Bullet Points.

Firearms Stocks Recommended

I subscribe to the Money and Markets email list. Today's email listed three picks as possible good choices for investors. Pick number two was:

Guns
Exchange-traded examples include Sturm, Ruger & Company (RGR) and Smith & Wesson (SWHC). Smith & Wesson has been a doormat until recently. But both it and Ruger enjoyed nice moves in the past couple weeks.

While Smith & Wesson has announced big plans for future growth, I prefer Ruger.
Its revenues and earnings are increasing, and the company's backlog in orders jumped 72 percent from the 3rd quarter to the 4th quarter.

Why is the outlook improving for gun manufacturers?

Maybe because while other industries are sliding down a slippery slope of lower demand, the output of U.S. small arms manufacturing is forecast to grow at an annual compounded rate of 2 percent between 2008 and 2013, as seen on the following chart ...

While others are in the perverbial toilet, firearms appears to be a safe investment for the time being.

Light Posting

As you have noticed, posting has been light as I was out of town last week on business. Much of the gun related news I have been keeping up with has been the continuing story of the Heller decision. As probably everyone expected, D.C. is trying everything it can not to fully comply with the decision such as not registering semi-auto pistols because they meet the D.C. definition of a "machine gun." Heller did get his pistol registered last week.

ABC News reports today that Smith & Wesson will manufacture a Commemorative Revolver and that proceeds from the sale will benefit the Second Amendment Foundation.

The Wall Street Journal on Saturday also had this article about Heller's attorney Alan Gura and how he "Save the Second Amendment."

Hat tip to Dave Hardy for the Gura article.