While most people aren’t overly interested in the stock market–that includes a lot of people who have money invested, to be fair–there is a good reason to pay attention to the stock prices of firearm companies.
For the last several months, the firearm industry has had plenty of good news. After all, sales have skyrocketed. Plus, since these are new gun owners, that means the customer base is growing overall. They’re not just selling to the same people as they were before.
That’s great news.
Now, investors are starting to see that and react accordingly.
The latest surge is probably driven by “unfilled demand from Covid, recent buying due to civil unrest and continued and perhaps heightened buying due to the upcoming election and potential for increased regulation following the election,” Lake Street analyst Mark Smith wrote in a note Tuesday. The last two items will drive “continued demand in June and through the fall,” he said.
Others on Wall Street agree. Cowen’s guns and ammunition analyst Cai Von Rumohr told clients that while virus lockdowns are starting to ease, demand for guns may “remain strong as civil unrest increases with the George Floyd protests.” Near-term firearms demand probably also would be “bolstered” if the election prospects for Democratic presidential nominee Joe Biden strengthen, given the party’s “more restrictive stance on gun control.”
Shares of gun makers Sturm Ruger & Co. and Smith & Wesson Brands have soared 14% and 25%, respectively, in the past two days. They’ve also outperformed the broader market over the past 13 months, with a strong surge coming since mid-March. That correlates with meaningful year-over-year gains in adjusted background checks of 80% in March, 69% in April and 75% in May. That’s a significant jump from the adjusted gains of 19% and 17% in January and February respectively.
Now, while many people don’t care about the market or stock prices in and of itself, increased prices can actually be good for gun rights.
Let’s not forget that activist investors like to buy stocks, then use their positions as stockholders to try and pressure the companies into capitulating with the gun grabbers’ demands.
While many of those investors currently have a stake in these companies, increased prices will help shut the door on new activists as well as make it more difficult for these anti-gunners to grow their positions.
Plus, a healthy stock price suggests that the companies themselves are healthy. That’s a good thing for all of us. After all, what good is the right to keep and bear arms if there are no arms to acquire in the first place? The firearm industry is vital toward feeding that need, and healthy companies mean they’ll be able to continue selling us the tools we need to maintain our freedom from tyranny.
That’s especially important in light of the countless people involved in lawless behavior in recent days. After all, if the people are going to destroy people’s lives like they have been, threatening folks with violence in the process, then those people need the means to defend themselves.
There’s absolutely no reason people shouldn’t also make a bit of money in the process.