In this piece, we will take a look at the 11 best gun stocks to buy in 2023. If you want to skip our overview of the ammunition industry, then take a look at the 5 Best Gun Stocks To Buy in 2023.
The US gun market is one of the biggest contributors to total economic activity in the country. The sector contributed about $80.7 billion last year, according to The US Firearm Industry Trade Association. In terms of job generation, the ammunition industry generated a total of 393,696 employment opportunities in the United States, while it paid about $25.6 billion in wages. The sector also plays a crucial role in terms of tax revenues as the industry and its workforce pay more than $7.5 billion in taxes including property, income, and sales-based levies, in addition to over $1.15 billion in federal excise taxes. Since the arrival of the recession in 2008, the US ammunition market has provided more than 390,000 employment opportunities.
A research by IBIS World said that the US gun sector had a market size of approximately $18.1 billion in 2022. On average, the US guns and ammunition industry has grown 6.2% annually between 2017 and 2022. In March 2020, 3 million more guns were sold in the US from January to March, the American think tank Brookings Institution estimated. The reason given by the research body was that social unrest was high during the pandemic and people preferred to purchase more firearms to stay safe. Globally, the guns and accessories sector size is expected to reach $9.3 billion by 2027, with a compound annual growth rate of 6.15% during the forecast tenure, Fortune Business Insights reported. In North America, Canada, Mexico, and the US are leading the ammunition market, while Germany, the UK, France, Italy, Russia, and Turkey are leading the European ammunition sector.
Gun sales in the United States have always remained high despite curbs, including the FBI’s National Instant Criminal Background Check System, implemented by state and federal authorities. According to SafeHome, around 17.4 million guns were sold in the US alone in 2022, while this year people have bought roughly 1.4 million guns every month in America between January and May 2023.
Considering gun sales and their trends in the US, we decided to take a look at some of the best gun stocks to buy in 2023.
To compile the list of the best gun stocks to buy in 2023, we filtered the largest ammunition and gun manufacturing companies in the United States and then we picked the top largest gun production companies. The stocks were ranked based on Insider Monkey’s database of 910 hedge funds tracked at the end of Q2 this year. The ranking was based on the ascending order of the number of hedge fund investors in each stock and then the top 11 largest gun stocks that are considered best to buy in 2023 are selected.
Scottsdale, Arizona-based, AMMO, Inc. (NASDAQ:POWW) ranks 11th in our list of the best gun stocks to buy in 2023. It reported adjusted earnings of $0.05 per share in fiscal Q1 that came ahead of analysts' expectations of $0.02. Net revenue for the quarter was $34.3 million. The company has been designing and manufacturing ammunition and guns throughout the US. It appointed Jared Smith as CEO in July.
Insider Monkey took a look at 910 hedge funds portfolios for Q2 2023 investments and found out that 4 had a stake in AMMO, Inc. (NASDAQ:POWW). The largest stakeholder was Thomas Soviero's Soviero Asset Management which had 1.1 million stakes of AMMO, Inc. (NASDAQ:POWW) that were valued at $2.4 million.
10. Big 5 Sporting Goods Corporation (NASDAQ:BGFV)
Number of Hedge Fund Holders: 5
With a market capitalization of $170 million, Big 5 Sporting Goods Corporation (NASDAQ:BGFV) ranks 10th in our list of the best gun stocks to buy in 2023. Founded in 1955 and headquartered in El Segundo, California, Big 5 Sporting Goods Corporation (NASDAQ:BGFV) has been providing athletic shoes, apparel, and sporting arms for rifles and shotguns services. It posted an EPS of $0.41 in Q2 and net sales of $223.6 million. The company has an average stock rating of hold, according to S&P Capital IQ analysts.
Out of 910 hedge funds profiled by Insider Monkey, 5 had stakes in Big 5 Sporting Goods Corporation (NASDAQ:BGFV). The largest stakeholder was Cliff Asness' AQR Capital Management which owned about 144,000 stakes of the firm that were valued at $1.3 million.
One of the biggest gun manufacturers in the US, Smith & Wesson Brands, Inc. (NASDAQ:SWBI) was founded in 1852 and is headquartered in Springfield, Massachusetts. With a market capitalization of $644 million, Smith & Wesson Brands, Inc. (NASDAQ:SWBI) ranks 9th in our list of the best gun stocks to buy in 2023. It manufacturers and sells firearms globally. Smith & Wesson Brands, Inc. (NASDAQ:SWBI) reported fiscal Q3 revenue of $129 million. It recently rolled out new products: M&P Metal and M&P 5.7, including M&P Folding Pistol Carbine. The firm has also recently introduced new pistol caliber carbine, the S&W Response, while it has also signed a new distribution partnership with Orion Wholesale in July.
Insider Monkey took a look at hedge fund portfolios for Smith & Wesson Brands, Inc. (NASDAQ:SWBI) second quarter of 2023 investments and found that 9 had stakes in the firm.
Along with Olin Corporation (NYSE:OLN), DICK'S Sporting Goods, Inc. (NYSE:DKS), and Axon Enterprise, Inc. (NASDAQ:AXON), Smith & Wesson Brands, Inc. (NASDAQ:SWBI) is one of the largest gun manufacturers in the US.
Incorporated in 2020 after its spin-off from Smith & Wesson Brands, Inc. (NASDAQ:SWBI), American Outdoor Brands, Inc. (NASDAQ:AOUT) is headquartered in Missouri. It ranks 8th in our list of the best gun stocks to buy in 2023. American Outdoor Brands, Inc. (NASDAQ:AOUT) posted fiscal Q1 EPS of $0.01 while analysts expected a loss of $0.03 per share. It has recently appointed Brent Vulgamott as the chief operating officer, which is a newly established position. Vulgamott was previously the company's vice president of sales, operations & analytics.
Out of 910 hedge funds profiled by Insider Monkey, 9 held stakes in American Outdoor Brands, Inc. (NASDAQ:AOUT). The largest stakeholder was Chuck Royce's Royce & Associates which owned roughly 334,000 stakes of American Outdoor Brands, Inc. (NASDAQ:AOUT) that were worth $2.9 million.
Sturm, Ruger & Company, Inc. (NYSE:RGR) designs, develops, and sells firearms in the US. Founded in 1949 and based in Southport, Connecticut, Sturm, Ruger & Company, Inc. (NYSE:RGR) has a market capitalization of $967 million and ranks 7th in our list of the best gun stocks to buy in 2023. It reported Q2 net sales of $142.8 million and diluted EPS of $0.91. In the second quarter, the company lunched new pistols in California including Mark IV pistol, the SR22 pistol, and the LCP pistol that were included to the California roster of certified handguns. The company has three major gun plants and a metal injection molding facility in Earth City, Missouri. Additionally, Sturm, Ruger & Company, Inc. (NYSE:RGR) has rolled out 5th edition of the Ruger Collector's Series 10/22 Rifle.
Insider Monkey took a look at Q2 hedge fund portfolios for Sturm, Ruger & Company, Inc. (NYSE:RGR) and found that 11 had stakes in the firm. Ken Griffin's Citadel Investment Group was the largest stakeholder of Sturm, Ruger & Company, Inc. (NYSE:RGR) which bought 84,700 stakes that were valued at $4.5 million.
With a market capitalization of $224 million, Clarus Corporation (NASDAQ:CLAR) ranks 6th in our list of the best gun stocks to buy in 2023. Headquartered in Salt Lake City, Utah and founded in 1957, Clarus Corporation (NASDAQ:CLAR) posted Q2 sales of $83.7 million. For Q3, the gun manufacturer anticipates consolidated sales of $100 million to $105 million, while the full-year 2023 sales are expected to be $385 million to $400 million.
Insider Monkey took a look at hedge fund portfolios for Clarus Corporation (NASDAQ:CLAR) second quarter of 2023 investments and found that 13 had stakes in the firm.
Along with Olin Corporation (NYSE:OLN), DICK'S Sporting Goods, Inc. (NYSE:DKS), and Axon Enterprise, Inc. (NASDAQ:AXON), Clarus Corporation (NASDAQ:CLAR) is one of the largest gun manufacturers in the US.
