american<u+2019>s affection for guns is stronger than ever. the same can<u+2019>t be said for gun stocks. donald trump <u+2019>s election victory surprisingly hasn<u+2019>t stopped gun enthusiasts from stocking up yet. more background checks for gun transactions were processed on black<u+00a0>friday than any other single day, according to the federal bureau of investigation. its data set goes back nearly two decades. but that doesn<u+2019>t change what is likely going to be more difficult times ahead for gun makers, including smith & wesson holding corp. the nation<u+2019>s largest gun maker by sales is set to report fiscal second-quarter earnings<u+00a0>on thursday. results should be strong, continuing a string of impressive quarterly performances. analysts forecast earnings for the period ended in october of 57 cents a share, up from 25 cents a year earlier. revenue is expected to have more than doubled to $228 million.<u+00a0>the stock is prone to sharp post-results moves, including several double-digit percentage swings in recent years. for smith & wesson, it is the outlook that could be concerning.<u+00a0>gun sales tend to surge when people are most fearful of politicians imposing new firearm restrictions. that was the case when it was assumed that hillary clinton would win the presidency. but those tighter restrictions likely won<u+2019>t happen under mr. trump, who was endorsed by the national rifle association. not surprisingly, smith & wesson<u+2019>s stock was one of the biggest losers immediately following the election. it shed one-fourth of its value in the three trading days after mr. trump<u+2019>s victory.<u+00a0>a gun-friendly republican administration could take an immediate toll on gun makers. analysts at wunderlich securities predict background checks, which have been increasing all year, might turn negative as soon as december. november<u+2019>s full-month registration figures are expected to be released this week. granted, smith & wesson isn<u+2019>t sitting still. it plans to change its name and ticker symbol , rebranding itself as american outdoor brands corp. that is a nod to how it has diversified into<u+00a0>the larger recreational and outdoor-sports market by acquiring makers of hunting knives, flashlights and camping equipment. but branding can go only so far. smith & wesson skeptics have been smelling opportunity for months. short interest, a proxy for investors betting against a stock, has more than doubled since the beginning of the year, recently hitting 21% of shares outstanding. that is the highest since january 2015. don<u+2019>t be surprised if smith & wesson bulls get even more gun-shy. write to steven russolillo at steven.russolillo@wsj.com
in trump win, gun stock smith & wesson loses  - wsj
steven russolillo