This Manufacturing Stock Is Going Off Target. Are Its Rivals Now a Buy?
The firearms industry is in the midst of a years-long ammunition shortage that was borne out of record-breaking demand, the pandemic, and supply chain issues. But the shortage might be about to get infinitely worse.
Specialty chemicals manufacturer Olin (NYSE: OLN), which also makes the well-regarded Winchester brand of ammo, may no longer be able to sell some of its most popular caliber rounds to the public. The rumored change is spurred by the U.S. Army, which has recently sought to rewrite its agreement with the ammo maker for its Lake City Army Ammunition Plant in Missouri.
Because the plant supplies as much as 30% of the consumer market for 5.56 millimeter rounds (also known as 5.56 NATO ammo), one of the most popular calibers of ammunition, closing off access to the public would exacerbate the shortage. While in theory it could boost sales for other manufacturers, they're already constrained by trying to keep ammo on the shelves so the change would lead to the cost of ammunition skyrocketing even further.
Source Fool.com
