Gun and Ammo Sales Help Lift Rural Stock Index
Fears that Democrats in Washington, D.C., will pass new laws
restricting firearms have lifted gun sales — and the Yonder 40, the
stock index for rural America.
Cabela’s stock took off in mid-April, after a story in the Wall Street Journal published a story about the run on guns and ammo. The Journal story reported that the Federal Bureau of Investigations had conducted 4 million background checks during the first three months of this year, up 27% from last year.
There’s been other news recently among Yonder 40 stocks:
• Peabody Energy, the large coal miner, made more money while mining less coal. Revenue for the last quarter went up 15% as production dropped 2.1%. The company is benefiting from long-term contracts that locked in higher prices. It recently lowered its prediction for production over the next 12 months.
• Food companies are advertising the value of their products during this recession. Research by Campbell’s, the soup company, has found that some consumers have limited shopping to the 1st and 15th of the month — paydays. People are dining out less and obeying their shopping lists. DY 40 member ConAgra Foods, which hadn’t advertised its Banquet frozen food dinners in more than a decade, began touting a new line of Banquet meals prices selling for $1.50. Kraft is advertising Kool-Aid for the first time in 11 years.
• Mohawk, the carpet maker, has been beaten and battered as housing sales have slumped. But the company projected higher earnings and the stock is up 43% this month.
• Workers at Smithfield’s bacon plant in Wilson, North Carolina, voted against joining the United Food and Commercial Workers union. The vote was 338 to 181. The union had won a vote at a hog processing plant in nearby Tar Heel, N.C., last year. North Carolina has the lowest number of unionized workers.
• Gaylord Entertainment (owner of the Grand Ole Opry) is up 47% so far this month. The stock had been battered by fears that the recession would reduce travel.
• Tractor Supply reported better than expected first quarter earnings and a 4.2% increase in same-store sales.
Here is how the Daily Yonder 40 stocks fared during the first full three weeks in April (April 4 through April 24):