As the 2024 election quickly approaches and Donald Trump’s (DJT) lead increases, a great deal of investment advice is being pushed as to what companies would do well with a DJT win. Does it seem ironic that two that may rank near the top of this list are guns and prisons? Let’s explore why the recently convicted felon who is waiting to see if he will be sentenced to jail, who in the meantime just had his ear pierced with an AR 15, should cause investors to flock to guns and prison stocks.
Industry Winners Under Trump
In a morbid twist of irony, investors have a reason to expect gun manufacturers and prison stocks to become huge winners if former President Donald Trump repositions himself in the Oval Office. Trump’s stance on gun rights and immigration would have significant positive implications for these sectors. At an NRA campaign event, Trump pledged to continue to defend the Second Amendment, which he claims is “under siege,” and has called himself “the best friend gun owners have ever had in the White House.”
After a New York court found the former president guilty on various charges, Donald Trump is scheduled to face sentencing on September 18, 2024. The charges could potentially involve extensive jail time. His sentencing was postponed from an earlier date as a Supreme Court ruling on presidential immunity is being reviewed; this could impact the outcome.
Gun Manufacturers Rally
If Trump returns to the White House, manufacturers like Smith & Wesson (NASDAQ:SWBI) and Sturm Ruger (NYSE:RGR) could increase sales and stock prices. Trump’s pro-Second Amendment stance is in stark contrast to his opponent, Joe Biden, who has advocated for stricter gun control measures.
Prison Stocks Strength
Deportation and Detention Prison stocks, including The GEO Group (NYSE:GEO) and CoreCivic (NYSE:CXW), could also benefit from a Trump victory. Biden’s administration has taken steps to reduce or eliminate the use of private prisons on the federal level. However, Trump’s policies on non-municipal detention centers and hardline immigration policies, which include plans to deport immigrants who entered the U.S. illegally, could be a boon to detention facilities.
The TipRanks Comparison Results Tool unequivocally shows that the four stocks mentioned in a hypothetical “Trump Irony Portfolio” had an explosive day on Monday.
The Trump Factor
A dramatic shift in leadership will create a dramatic change of winners and losers. A second term of the Trump administration will lead to expectations of a more hawkish trade policy, reduced regulation, and an easing of carbon footprint demands. There are also expectations of extending corporate and personal tax cuts, which could restimulate an economy battling inflation.
Key Takeaway
As the 2024 election approaches, investors closely watch the race and its potential impact on various industries. Gun manufacturers and prison stocks have emerged as possible beneficiaries of a Trump victory, but the situation remains complex and uncertain. More than three months are left before voters cast their ballots, and only time will tell how the election will shape the market and investor sentiment.
