NEW YORK (TheStreet) -- On Tuesday, I opened up my copy of the Wall Street Journal and staring back at me on the front page are the words "White House Efforts to Relax Gun Exports Face Resistance."
Huh? How did I miss the memo about the Obama administration no longer trying to take all our guns away?
Sure enough, as I read through the article it appears, at least at face value, that the Obama administration has stated they want to increase employment with this initiative.
Currently, American defense manufacturers face a disadvantage against foreign competitors due to burdensome bureaucracy and regulations. The idea is to help level the playing field.
Promoting existing profitable businesses appears to be a much better long-term solution compared to selecting winners and losers with hundreds of millions of taxpayer dollars. The bankrupt
quickly comes to mind as an example of what not to do.
Reading further into the article, it appears the main resistance comes from the U.S. Department of Homeland-Security. This appears at least a little odd that an executive department is opposed to the idea, while the president is publicly promoting it.
I have to believe the topic "came up" at some point earlier, which means some posturing is going on. With an election right around the corner it can be challenging to see through the fog, but at least we can look at what companies are likely to benefit from greater gun exports.
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Using the word "gun" in a title is a much better attention-grabber than "arms" or "military equipment" (it caught your attention right?), so it's understandable why the
Wall Street Journal
used "gun" instead of "military equipment." However, the effort extends much further than just guns.
I created a
list of companies
that are unlikely to fall in value if nothing happens, yet have significant sales if allowed to increase sales. It's a "heads I win, tails I break-even" type of toss, and one I take advantage of every time one comes my way.
Let's look at six companies that are likely to benefit:
Smith & Wesson
(SWHC - Get Report)
Sturm Ruger & Co.
(RGR - Get Report)
are totally hitting bullseyes. Increasing exports would simply be moving the target a little closer for either one.