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Tuesday, December 8, 2015

Ruger Stocks up 66%, Smith and Wesson up 116% in 2015

The headline on the Market Watch article is "Gun stocks rally after Obama’s prime-time address on terrorism."   Note, this is after Obama only repeated what he has been doing since the summer, telling Congress to pass laws that would not have prevented any of the mass shootings that have take place in the last four months.  Given he was holding a prime time address and at least one member of  the administration said the president would address gun control, many gun owners probably thought Obama was finally going to drop the boom and use so-called "executive actions" to get the restrictions he can't get from Congress.  In the end, it was just more of the same.  That did not stop investors from being bullish on the two publicly traded firearm manufacturers:
Shares of the two publicly traded gun makers rallied on Monday, a day after President Barack Obama gave a prime-time address calling for a modest reduction in the availability of firearms.

Smith & Wesson SWHC, +2.25%  closed 8% higher and Sturm Ruger & Co. RGR, +5.85%  rose 6% on Monday.

Smith & Wesson has climbed 116% this year, and Sturm Ruger has jumped 66%.
Obama on Sunday night said no one on the no-fly list should be able to buy a gun and that it should be harder for people to buy powerful assault weapons like the ones used in the San Bernardino massacre.

But with Congress in paralysis on the issue, the logic on Wall Street is that the increased talk of gun restriction will spur more sales, as has happened in previous instances.
Market Watch also noted that November background checks, an indicator of gun sales though imperfect, were higher than they had been in 20 months and Black Friday numbers set records.  Look for that to continue in December.  A combination of more people looking to take steps to protect themselves and Obama pushing gun control is a recipe for increased sales.

Hat tip to Sebastian.

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