Sturm Ruger (NYSE:RGR)

For those that don’t recognise the name, Ruger is a brand of gun. In the last couple of years gun sales have exploded in the U.S. as the Obama administration’s stance on stricter gun controls has sent people rushing out to buy guns for fear they will soon be restricted. Despite record sales the market is very pessimistic about gun manufacturers in general, RGR trades at a P/E of just 11.2 and Smith & Wesson (SWHC) trades at just 9.6. That is surprising when you take a look at their financial results.

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