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Guns, vice stocks post solid gains this year

12:28 PM, Dec 19, 2012   |    comments
Stocks of alcohol makers have performed well this year.(Photo: Diageo)
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Sin is still in on Wall Street, despite the recent slide in gun stocks following last week's shooting at a Connecticut elementary school.

Shares of gun, tobacco and gambling stocks are all performing well, each still enjoying the lift they traditionally get during times of sluggish economic growth.

The Vice mutual fund, which owns defense stocks in addition to guns, alcohol and tobacco stocks, is up more than 20% this year, topping the nearly 14% gain by the broader Standard & Poor's 500.

Alcohol stocks have been especially profitable, as sales of spirits continue to be strong. Constellation Brands, the company that produces Robert Mondavi wine and Black Velvet whiskey for instance, has seen its shares (STZ) soar 70% this year. Diageo (DGEAF)) is up 35%.

Gun stocks have been even bigger standouts. Consumers have loaded up on firearms the past year. Despite the 18.3% and 14.9% selloffs in their shares since last week's shootings, Smith & Wesson (SWHC) and Sturm Ruger (RGR) are up 119% and 43% this year, respectively.

Some investors worry the rally in gun stocks could be in trouble if lawmakers ban assault weapons, which had been a big area of growth for gun companies..

If there's a relative laggard in the "sin" group it's casinos, which have been hit by more competition in the U.S. and weaker demand in the growth area of Macau. Las Vegas Sands (LVS), MGM (MGM) and Wynn Resorts (WYNN) are up 7.5%, 9.6% and 3.4%, showing that they've not only lagged other sin stocks, they've been left behind in the market's rally this year.

USA Today

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