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Smith & Wesson shares up on rising gun sales

NEW YORK (AP) -- Shares of firearms maker Smith & Wesson Holding Corp. hit a new 52-week high Monday after a Wedbush analyst said that gun sales are rising on worries that President Barack Obama may tighten gun laws if he is reelected.

THE SPARK: Wedbush analyst Rommel Dionisio reiterated his "Outperform" rating on the stock and raised its price target to $10 from $7.

THE BIG PICTURE: Smith & Wesson's rivals are also seeing higher demand for guns. On March 21, Sturm, Ruger & Co. Inc. said that it has received orders for more than one million units, forcing it to stop accepting new orders until it can catch up. Smith & Wesson might be able to gain more market share from Sturm, Ruger & Co. while it halts new orders, Dionisio said.

Similar fears about possible gun policies boosted gun sales for a year after Obama was elected, Dionisio said in a note to clients, although gun laws were little changed.

THE ANALYSIS: Besides higher sales, Dionisio said Smith & Wesson's new handgun could help boost its stock.

SHARE ACTION: Up 45 cents, or 5.8 percent, at $8.20 in afternoon trading.