Are you looking to expand your investment portfolio? Let’s look into an option in the armoury sector. Remington Arms is an American manufacturer of firearms and ammunition.
Remington Arms is an American manufacturer of firearms and ammunition. Remington is not a publicly-traded company and therefore you cannot buy stock in it. It has also faced backlash and various lawsuits regarding the use of its products – and has had to visit bankruptcy court twice. Therefore Remington is not a company that would make a good investment for your portfolio. However, there are some other armoury companies that, during the pandemic, have soared in sales and would be a particularly good investment.
Let’s dive into this article and have a look at the demise of Remington Arms, some other companies specialising in gun manufacturing and a little bit about their success and stock shares.
What is Remington Arms?
Remington Arms is an American manufacturer of firearms and ammunition. According to ATF statistics, it was the largest rifle manufacturer in North America in 2015. Remington Arms has been around for 200 years. Firearms and Ammunition are now two separate companies, all under the Remington brand. The Remington factory is located in Ilion, New York.
It all started with Eliphalet Remington II when he handcrafted his first rifle barrel at his father’s forge in 1816. From there, he established a rifle-making business and sold them throughout America. In 1845, Eliphalet gained his first firearms contract to the U.S Army – manufacturing 5,000 rifles. A few months after this, he received another contract to manufacture 1,000 Jenks Breech-loading carbines for the government. In 1856, Elliphalet’s three sons’s joined him in business and it became ‘E. Remington & Sons’. The Civil War began in 1861 with Remington Arms supplying much of the armoury to the Army and Navy, then the founder Eliphalet died and left the control to his three sons. When the war ended, they moved on to making firearms for hunters and sportsmen. In 1871, the Remington Ammunition Works was founded, to produce the ammunition for the weapons. When World War I occurred in 1917, Remington Arms provided many different arms and ammunition to the United States allies. By the end of the war, they had provided half the small arms ammunition used by the Allies during the entire conflict.
Can you buy stock in Remington Guns?
Remington is not a publicly-traded company and therefore you cannot buy stock in it.
Remington Arms, in 2018, sought Chapter 11 bankruptcy protection. Chapter 11 means that the company can reorganise itself, either by forming a partnership; or in Remington’s case, selling parts of the company. It is an exchange of equity to get out of debt. In 2018 they experienced falling sales as well as a lawsuit tied to the Sandy Hook Elementary School Massacre in 2012. The suit was regarding the rifle that Adam Lanza used to kill 20 schoolchildren and six adults. However, the lawsuit was dismissed by a Superior Court Judge as they cited a federal law that prohibits lawsuits against gun makers when a weapon functions “as designed and intended”. Remington Arms was therefore cleared of any wrongdoing but investors who were disgusted by the event distanced themselves from the Company’s owner. Therefore, investment in the company decreased, despite clearance in court.
It has been noted that when Presidents who are more likely to pursue more stringent gun control laws are elected, gun sales spike so that they are already in possession of one before the new laws. However, when Donald Trump was in power in 2020, this didn’t occur as he was not opposed to gun ownership. Bustle state that in the first nine months that Trump was in power, Remington sales plummeted by 27.5%. This is another factor that perhaps contributed to the decrease in Remington Arms sales and the consequential filing of bankruptcy.
Despite the surge in gun sales in the US in 2020, Barron’s has explained that Remington has taken a second turn in Bankruptcy court in two years as it attempts to sell the business. This is due to their struggle in managing their debt load. According to Bustle, Remington had to borrow a lot of money to buy out the investors that wanted to distance themselves from the company. In their bankruptcy filings, the company had between $100 million and $500 million in debt. They have now, in 2020, broken up parts of the company to auction. Vista Outdoor Inc purchased Remington’s Lonoke ammunition business for $81.4million.
Are there better ways to invest my money in the same area?
Due to the panic and chaos emerging in the global pandemic, with fear surrounding the unknown, people have turned to firearms for self-defence reasons. In the USA, 2020, January through May saw retail sales of firearms of 15.2 million units. To put this into perspective, Americans bought 14 million firearms in the whole of 2009.
Investor Place suggests that the firearm demand can be broken down into four waves. The first being, Asian Americans arming themselves because they are fearful of racist scapegoating. The second wave came in economic fears as the job market began to collapse. This drove people to invest in gunstock. The third perhaps due to the riots in the name of George Floyd and the detest of law enforcement. Then the fourth wave could be due to the political changes in America
According to Investorplace.com, there are 7-gun stocks to buy during the pandemic.
The 7 gun stocks according to Investor Place to buy are, Smith & Wesson Brands (NASDAQ:SWBI), Sturm Ruger (NYSE:RGR), Vista Outdoor (NYSE:VSTO), Olin Corporation (NYSE:OLN), Sportsman’s Warehouse (NASDAQ:SPWH), Axon Enterprise (NASDAQ:AAXN), Big 5 Sporting Goods (NASDAQ:BGFV).
One aspect that sees consistent buying in Ruger, which makes their stock so strong, is that they are known for reliable firearms. Due to the fear that has arisen in the pandemic, lots of first-timers are looking for arms, and this is a brand they consider – increasing the sales massively. In 2020, shares in Smith & Wesson were up by 166%. These statistics demonstrate that shares in the stock of some armoury companies may be a successful choice.
It is interesting that whilst these companies experienced soars in sales, Remington Arms did not have the same success.
We hope that you have found this an interesting read and that this has answered any questions you may have had.