With so many mass shootings over the last couple of months, it’s easy to believe that even with the massive Black Friday, there’s still little good news for the firearm industry. However, as news broke of national reciprocity being so close to becoming law, it appears that stocks for gun companies started rallying.
An impending vote on concealed carry reciprocity may have bumped share prices for major gun makers up 3 percent this week.
Stock for American Outdoor Brands — the holding company of Smith & Wesson — and Sturm, Ruger and Co. closed 3.55 percent and 2.87 percent higher Monday. Share prices for Vista Outdoor — owner of more than three dozen companies in firearms, ammunition and shooting accessories, including Savage Arms, Stevens, Federal Premium, Speer and American Eagle — likewise climbed more than 5.6 percent.
The market reaction follows chatter on Capitol Hill over H.R. 38, the Concealed Carry Reciprocity Act of 2017, as it winds its way through committee in preparation for a floor vote later this week. Lawmakers will likely amend portions of the Fix NICS Act into the measure in an attempt to bring Democrats on board, Guns.com previously reported.
Fix NICS incentivizes states and federal agencies to upload disqualifying records into the databases feeding the National Instant Criminal Background Check System — the application gun dealers use to verify a buyer’s identity and criminal history.
The system came under scrutiny last month after a man gunned down 26 people in a Texas church with a rifle he bought legally — despite his domestic assault convictions and bad conduct discharge from the Air Force three years earlier. Military officials admitted failing to report the shooter’s criminal record to the FBI — an endemic problem dating back two decades. A review of Department of Justice records in 1997 and 2015 found roughly one third of service members’ criminal convictions were missing from federal databases.
The Fix NICS bill is a far more controversial piece of legislation, and while folding it into HR 38 may make the bill more palatable to Democrats, it may also serve as a poison pill for many Republicans who may view the bill as being untouchable. This is especially true in light of the tough comments from the Gun Owners of America which derided the bill last week.
Luckily, it doesn’t appear Fix NICS is enough to run off investors who apparently expect the national reciprocity bill to spur addition gun sales, or at least create a stronger gun market.
Whether those investors know about Fix NICS–and it’s possible they don’t since the bill is non-controversial in the mainstream media–or not remains to be seen, however. It’s possible that they are unfamiliar with the strong sentiment against the NICS bill.
Regardless, this is likely good news for investors who already have stock with these companies. As the price increases, the value of their investment does as well. It’s not exactly rocket science, after all.
Further, though, it can create an opportunity for most investment and expansion of the company as more and more investors buy in, injecting cash that can be used for new hires, expansion of physical plants, and new tooling.
Plus, it helps keep the companies around for a lot longer, which means they get to keep selling stuff for us to buy.