Stock market surge for firearms manufacturers?

posted at 10:41 am on January 6, 2016 by Ed Morrissey

Demand for firearms has spiked over the last few months, correlating with if not caused by Barack Obama’s pledge to act on his gun-control agenda. Last year set a record for FBI background checks on firearms sales, although that may be in part due to a change in Kentucky that now requires monthly background checks for existing carry-permit holders. ABC News reports that December 2015 set a monthly record for background checks, indicating momentum rolling into 2016:

As President Obama pushes for stronger gun control measures in the United States, FBI data shows that gun background checks have soared in recent years.

FBI background checks, which are often used as an indicator of sales trends, hit a record of 3,314,594 in December 2015 and 23.1 million for the year. It was the first month with more than 3 million since the FBI began tracking the data in 1998.

The single highest day was Black Friday (Nov. 27), when the agency processed a record 185,345 firearms background checks, which was consistent with past holiday season spikes.

Background checks do not always correlate to sales, but it’s probably as good a measure one can find outside of retailer data. One background check could relate to one firearm sold, or to multiple firearms, depending on what the buyer chose after clearing the check. Or it might not relate to a sale at all, but rather a permit application or renewal. In Kentucky, permit holders will have to get multiple checks during the year, but most of those won’t have anything to do with sales.

Still, no one doubts that sales are increasing, and with them the value of shares in publicly held firearms manufacturers. ABC News reported a spike in share prices for Smith & Wesson and Sturm Ruger, two American manufacturers, just prior to Obama’s presser yesterday. Reuters noted that the entire sector has gained significant strength in the face of government hostility to their industry:

Shares of gun manufacturers soared again on Tuesday after President Barack Obama unveiled gun control measures and Smith & Wesson Holding Corp released a more bullish financial outlook.

Smith & Wesson shares were up 12.2 percent to $26.12 in morning trade after touching a record high of $26.54 earlier in the session. Shares of rival Sturm Ruger & Co jumped 7.4 percent to $65.95 after rising to a 1-1/2-year high of $66.93. …

“Based on the past multiple years, when gun control becomes a big political topic in the headlines, these stocks do well,” said Chris Krueger, an analyst at Lake Street Capital Markets, noting that it leads to speculation that those people inclined to buy firearms will do so ahead of new restrictions.

Late on Monday, Smith & Wesson boosted its third quarter and full fiscal year sales and earnings outlook. The company said that “the sell-through rate of its products at distribution has been stronger than originally anticipated.”

This reaction isn’t new, nor is the spike momentary. Earlier today, Reuters sent out a graph showing the performance of Sturm Ruger and Smith & Wesson against the S&P 500 over the last five years, and the trend shows not just spikes but consistent and gaining strength:

What to make of this? First, the two spikes obviously correlate to the biggest White House pushes for gun control — after Newtown and over the last three months. But these two stocks began outperforming the S&P long before then. Even the “trough” period in 2014 still put growth better than the S&P trend, and even at its lowest point. Perhaps this pattern has to do with Obama’s re-election effort starting in early 2012, or with the realization that Democrats have put aside their rational calculations about the dangers of pursuing gun control in favor of sheer demagoguery.

Whatever causal/correlative forces are at work, there’s one very clear lesson from the data. Americans are investing in firearms despite the hysterical rhetoric coming from Washington and the media. They are investing in their own firearms, and putting their money into the manufacturers who supply them. Americans are figuratively putting their money where their mouths are. That’s a market signal that Democrats ignore at their own political peril.

Update: Removed a Bidenesque “literally.” sigh.


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Comments

I’ve made a killing with gun stocks.

Thanks, obama!!

HumpBot Salvation on January 6, 2016 at 10:45 AM

Long ammo manufacturing stocks. Just saying.

Thanx jugears.

platypus on January 6, 2016 at 10:48 AM

Gun and tissue paper stocks are soaring.

VegasRick on January 6, 2016 at 10:49 AM

…I think JugEars is heavily invested in gun manufacturing!

JugEarsButtHurt on January 6, 2016 at 10:49 AM

I’ve made a killing with gun stocks.

Thanks, obama!!

HumpBot Salvation on January 6, 2016 at 10:45 AM

Interesting. Didn’t even know the typical delusional tea partier knew what a stock is? Too busy being angry at everyone and everything that isn’t them.

farleftprogressive on January 6, 2016 at 10:49 AM

If gun manufacturers were smart they would be writing secret love letters to Obama imploring him to talk about guns more.

NotCoach on January 6, 2016 at 10:50 AM

Interesting. Didn’t even know the typical delusional tea partier knew what a stock is? Too busy being angry at everyone and everything that isn’t them.

farleftprogressive on January 6, 2016 at 10:49 AM

Try harder.

NotCoach on January 6, 2016 at 10:51 AM

Interesting. Didn’t even know the typical delusional tea partier knew what a stock is? Too busy being angry at everyone and everything that isn’t them.

farleftprogressive on January 6, 2016 at 10:49 AM

Heh, talk about a narrow view of reality.

antipc on January 6, 2016 at 10:54 AM

Boy howdy! 0bama’s failed crybully bit, and our failure to fall for it, have really brought out quite the infestation of trolls.

CurtZHP on January 6, 2016 at 10:54 AM

Interesting. Didn’t even know the typical delusional tea partier knew what a stock is? Too busy being angry at everyone and everything that isn’t them.

farleftprogressive on January 6, 2016 at 10:49 AM

Change your socks.

HumpBot Salvation on January 6, 2016 at 10:55 AM

Heh, talk about a narrow view of reality.

antipc on January 6, 2016 at 10:54 AM

It’s typical of the leftist hive mind. They can only keep one thought in their head at a time; usually a grievance of some kind; which is why they’re pissed off all the time. They then immediately assume that, if you’re pissed off about something at any given moment, that’s the only thing you’re thinking about ever.

CurtZHP on January 6, 2016 at 10:56 AM

farleftprogressive on January 6, 2016 at 10:49 AM

Meh, just, meh.

vnvet on January 6, 2016 at 10:59 AM

On or off topic, all the same anyway these days

Happening

Not all lefties are stupid.

Schadenfreude on January 6, 2016 at 11:01 AM

Interesting. Didn’t even know the typical delusional tea partier knew what a stock is? Too busy being angry at everyone and everything that isn’t them.

farleftprogressive on January 6, 2016 at 10:49 AM

LOL!!! Delusional ?! Takes one to know one, definitely. You wouldn’t understand what the Tea Party means if we tattooed it on your forehead, TROLL.

deadrody on January 6, 2016 at 11:01 AM

It’s typical of the leftist hive mind. They can only keep one thought in their head at a time; usually a grievance of some kind; which is why they’re pissed off all the time. They then immediately assume that, if you’re pissed off about something at any given moment, that’s the only thing you’re thinking about ever.

CurtZHP on January 6, 2016 at 10:56 AM

The left also projects a lot. They project their mindset on everyone else because they are so closed minded they are incapable of realizing that not everyone “thinks” like them. Which is why we can usually figure out what they are doing by what they accuse US of doing.

ConstantineXI on January 6, 2016 at 11:04 AM

OT – y’all notice how schizoid our national political media is? Check out the top “Headline” links right now. One wonders why Rubio isn’t the GOP favorite and the other wonders why the GOP won’t back Rubio.

DanMan on January 6, 2016 at 11:07 AM

The possibility of Donald “I support the ban on assault weapons” Trump becoming president might also play a role.

Jeffreyvdb on January 6, 2016 at 11:07 AM

Interesting. Didn’t even know the typical delusional tea partier knew what a stock is? Too busy being angry at everyone and everything that isn’t them.

farleftprogressive on January 6, 2016 at 10:49 AM

The world has prepared a helluva lot of surprises for you, to be delivered once you decide to pull your head out of your rear entry.

Rix on January 6, 2016 at 11:09 AM

farleftprogressive

Name courtesy of the Department of Redundancy Department.

F X Muldoon on January 6, 2016 at 11:17 AM

Never thought that livelikeaslave was smart.

Schadenfreude on January 6, 2016 at 11:20 AM

Just another example.

When your policies constantly defy logic and the will of the people, there is going to be A LOT of unintended consequences.

Oxymoron on January 6, 2016 at 11:25 AM

everything that isn’t them.

farleftprogressive on January 6, 2016 at 10:49 AM

Racist slave, forever.

Schadenfreude on January 6, 2016 at 11:26 AM

I wonder if there’s any information on how much of the spike is from new gun owners.

Ukiah on January 6, 2016 at 11:30 AM

On or off topic, all the same anyway these days

Happening

Not all lefties are stupid.

Schadenfreude on January 6, 2016 at 11:01 AM

LOL Blind LIVs leading the blind LIVs.

As long as they’re not voting for Hillary, I’m on board I guess.

Oxymoron on January 6, 2016 at 11:32 AM

Interesting. Didn’t even know the typical delusional tea partier knew what a stock is? Too busy being angry at everyone and everything that isn’t them.

farleftprogressive on January 6, 2016 at 10:49 AM

It’s
‘teabagger’ – get your terms right. And that sentence shouldn’t end with a question mark.

fossten on January 6, 2016 at 11:33 AM

I’ve made a killing with gun stocks.
HumpBot Salvation on January 6, 2016 at 10:45 AM

I’ve done all of my killing with the triggers, barrels, chambers and ammunition feeding mechanisms. Of course it was all paper, tin cans, milk jugs and old, dead electronics. :-)

Lammo on January 6, 2016 at 11:36 AM

The left also projects a lot. They project their mindset on everyone else because they are so closed minded they are incapable of realizing that not everyone “thinks” like them. Which is why we can usually figure out what they are doing by what they accuse US of doing.

ConstantineXI on January 6, 2016 at 11:04 AM

I’ve thought the same thing for years. Like how they paint conservatives as so corrupt by projecting their own crimes, fraud, grift, etc onto their opponents.

Oxymoron on January 6, 2016 at 11:39 AM

Weepy Mcweepster, best gun salesman in the USA.

MichaelGabriel on January 6, 2016 at 11:43 AM

Interesting. Didn’t even know the typical delusional tea partier knew what a stock is? Too busy being angry at everyone and everything that isn’t them.

farleftprogressive on January 6, 2016 at 10:49 AM

Project much?

dominigan on January 6, 2016 at 11:43 AM

Interesting. Didn’t even know the typical delusional tea partier knew what a stock is? Too busy being angry at everyone and everything that isn’t them.

farleftprogressive on January 6, 2016 at 10:49 AM

Crikey, make up your mind already. Either we’re troglodytes that are too ignorant to know anything, or else we’re exploiting, earth be damned capitalists who want Wall Street to run amok and make us rich.

Obviously, you never had a clue that the Tea Party was about the insanity of excessive government spending and annual trillion dollar deficits. No t racism, not violence, just sanity in getting out go to match income.

We follow financial matters because a) we realize there isn’t an infinite supply of money to spend carelessly (unlike Liberals) and b) we try to take care of ourselves by any and all legal means available, e.g. working, investing and saving, rather than sit back and let the government dole out money for doing nothing.

parke on January 6, 2016 at 11:49 AM

Dam – I wish I had held onto my S&W stock longer……

dentarthurdent on January 6, 2016 at 11:56 AM

…someone needs to change their name to dumberthanphuck!

JugEarsButtHurt on January 6, 2016 at 11:57 AM

Interesting. Didn’t even know the typical delusional tea partier knew what a stock is?
farleftprogressive on January 6, 2016 at 10:49 AM

Duhhh – it’s the really dangerous back thingy that goes up on the gun – makes them waaaay more powerful – even more than zombie green paint…..

dentarthurdent on January 6, 2016 at 11:58 AM

I’ve made a killing with gun stocks.
HumpBot Salvation on January 6, 2016 at 10:45 AM

Welllll, if you run out of ammo, that may be your last option – but you gotta swing it just right – unless you have one o them dangerous killer bayonet lugs handy…….

dentarthurdent on January 6, 2016 at 12:01 PM

Welllll, if you run out of ammo, that may be your last option – but you gotta swing it just right – unless you have one o them dangerous killer bayonet lugs handy…….

dentarthurdent on January 6, 2016 at 12:01 PM

All my stocks have those bayonet lugs and clip holders and shroud thingamajigs. They also have multi-automatic capability. Why do you think they are so valuable? Duh!

HumpBot Salvation on January 6, 2016 at 12:08 PM

All my stocks have those bayonet lugs and clip holders and shroud thingamajigs. They also have multi-automatic capability. Why do you think they are so valuable? Duh!

HumpBot Salvation on January 6, 2016 at 12:08 PM

LOL – clearly you’re one of those dangerous gun nuts the leftards are so worried about…..

dentarthurdent on January 6, 2016 at 12:10 PM

If I’d invested heavily in gun stocks in late 2008 I’d be able to retire now.

ConstantineXI on January 6, 2016 at 12:22 PM

I’ve made a killing with gun stocks.

Thanks, obama!!

HumpBot Salvation on January 6, 2016 at 10:45 AM

But the burning question is;

Is your stock one of those super dangerous collapsing ones?

I hear that makes any weapon an “ASSAULT WEAPON’ AND WE KNOW HOW BAD THOSE ARE!!!!!!!!!!!!!!!

D-fusit on January 6, 2016 at 12:49 PM

I have a 4 month old polydactal kitten with 9 toes (and claws) on each front foot, 7 on his rear feet (total of 32!). He’s a black tabby.

Does that make him some kind of scary Assault Cat™?

ConstantineXI on January 6, 2016 at 12:51 PM

I have a 4 month old polydactal kitten with 9 toes (and claws) on each front foot, 7 on his rear feet (total of 32!). He’s a black tabby.

Does that make him some kind of scary Assault Cat™?

ConstantineXI on January 6, 2016 at 12:51 PM

#blackclawsmatter

dentarthurdent on January 6, 2016 at 1:00 PM

Interesting. Didn’t even know the typical delusional tea partier knew what a stock is? Too busy being angry at everyone and everything that isn’t them.

farleftprogressive on January 6, 2016 at 10:49 AM

Hey, that’s insulting! We love money and punting small animals too!

Chuck Schick on January 6, 2016 at 1:18 PM

Hey, that’s insulting! We love money and punting grilling small animals too!

Chuck Schick on January 6, 2016 at 1:18 PM

No no no – punting them ruins the meat……

dentarthurdent on January 6, 2016 at 1:24 PM

I promised my son for his 21st b-day I would buy him his dream gun, a new Springfield model 1911 .45cal pistol.
It is a modern companion sidearm for his M1 Garand.

But because of Obama I got it early, a present for Christmas (along with 100 target and 50 personal protection rounds).

Of course the gun is in my name and possession but on his 21st b-day we will transfer it over to him.

My question is does the BO executive order prevent me from doing this because I am not a licensed dealer?

mechkiller_k on January 6, 2016 at 1:46 PM

OT- why does the preview no longer work in IE11 and Chrome?

mechkiller_k on January 6, 2016 at 1:47 PM

My question is does the BO executive order prevent me from doing this because I am not a licensed dealer?

mechkiller_k on January 6, 2016 at 1:46 PM

Only if you tell King Putt, or anyone else about it.

dentarthurdent on January 6, 2016 at 2:13 PM

My question is does the BO executive order prevent me from doing this because I am not a licensed dealer?

mechkiller_k on January 6, 2016 at 1:46 PM

Are you in a state that says you’re supposed to register your guns?

dentarthurdent on January 6, 2016 at 2:15 PM

Stock market surge for firearms manufacturers?

So what? The Dow’s down a thousand points in less than a month’s time.

“Thank you, President Obama!”

Dr. ZhivBlago on January 6, 2016 at 3:22 PM

So what? The Dow’s down a thousand points in less than a month’s time.

“Thank you, President Obama!”

Dr. ZhivBlago on January 6, 2016 at 3:22 PM

Somewhat OT, but, the Dow looks like it may have a major top forming. If it goes into a long-term bear market, we could be looking at a possible low in the 8,000 to 9,000 range. Personally, I kind of doubt it would go all the way down there, but it’s possible.

trigon on January 6, 2016 at 4:01 PM

While what the Democrats are doing with gun control is outrageous, you have to get a big laugh out of how counterproductive they are. Because of the Democrats’ efforts, more and more Americans are arming themselves. This is a good thing for the country. I have to say “Keep up the good work!”

bartbeast on January 6, 2016 at 5:27 PM