Gun stocks look loaded for earnings

Amid all the recent press and politics surrounding the 2nd Amendment, publicly traded firearm stocks witness ramping up.

By Benzinga Jan 16, 2013 1:52PM
 Men with toy guns copyright Leander Baerenz, Digital Vision, Getty ImagesBy Jake L'Ecuyer 

Word has spread like wildfire that firearm sales have skyrocketed over the past two months, but are these claims founded?


According to the FBI, there are currently over 160 million registered firearms on the market. In 2012, the number of average monthly firearm registrations -- the generally accepted measure for legal firearm sales -- came in at 1.632 million per month.


The sales in November broke free of this average however, soaring above it by 18.64%, coming in at 2.006 million, while December sales utterly destroyed the average, rising to 2.783 million, a staggering 41.34% beat.


To check these numbers, the Benzinga team called two dozen gun shops in Michigan and received some interesting responses. Of the shops surveyed, 70% reported a large increase in sales over the past two months, while a full 42% reported significant difficulty re-stocking everything from hunting rifles to ammunition and accessories. Everything is flying off the shelves.


For a state ranking 41st in the number of registered firearms owned by civilians, this hints at a massive increase in sales nationwide.


What does this mean for firearm makers Smith & Wesson (SWHC) and Sturm Ruger (RGR)?


After both companies posted earnings beats in December and October respectively on much lower national sales, it looks like they are poised to not just beat analyst estimates, but blow them out of the water.


Of the two, Sturm Ruger's earnings are up first when the company reports on Feb. 25. The quarter it's reporting for ended Dec. 30, landing the two record months of national sales right in the company's earnings period.


So while fears of regulation and a massive short float of almost 50% keep the stock at bay, earnings may send it back towards 52-week highs.


Smith & Wesson, on the other hand, reprts earnings on March 5 for the quarter ending Jan. 13. If you're particularly bullish on the sales growth from December into January, like much of our research seems to show, this may be the better pick to take advantage of the increase in sales.


With a short float of over 22%, the stock is still prone to short squeezes, but nothing comparable to those that can be seen in Ruger.


Shares of Sturm Ruger were up 4% to $49.92 in midday trading Wednesday, while Smith and Wesson shares were up over 3% to $8.69. 

 

More from Benzinga
30Comments
Jan 16, 2013 5:55PM
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While we are busy fighting over gun control....Little Ole Timmy G. has his hand in the piggy bank of the Federal Employee Pension Fund.  As of Jan. 15,2013, Timmy G. has been taking money from the Employee Pension Fund to pay our debts.  He said he would replace it when the debt ceiling has been increased.  Yeah, sure he will, just like the government replace the money they stole from social security.

 

This government has raped social security and there is nothing left so move on to the Federal Employee Pension Fund. 

Jan 16, 2013 5:50PM
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What do they expect. We have IDIOTS using the "Bill of Rights" as toilet paper. They can't even balance a "Budget".  Of course your are going to want to be able to protect yourself. Buy a firearm while you still can. You may soon need it to stop the onslaught of jack booted thugs.
Jan 16, 2013 5:57PM
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We can pass every kind of gun law or gun ban imaginable and it won’t help one emotionally or mentally ill person, or address the continuing moral decay of our society. Pandora is out of the box, there are too many guns already out there for a government which is broke to do a buyback program. There are too many people fearful about the future direction our society and country is headed in to voluntarily give up their weapons or stop buying more.  We need to focus on the true issues not a shallow propaganda campaign that takes away a law abiding citizens ability to stop someone on a rampage or prevent a criminal act. Take away guns and bad people will adapt, doesn’t matter if they use box cutters, or fertilizer bombs they will find another way to hurt and kill.
Jan 16, 2013 6:06PM
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An Oregon sherriff has refused to enforce Obummer's 23 executive actions.
Jan 16, 2013 5:51PM
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Obummer has done more to increase the price of guns than the NRA could have done in thousands of dollars of advertisement.
Jan 16, 2013 6:15PM
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Rand Paul is asking congress to defund Obummer's 23 executive actions, wow that's a good way to shut Obummer down.
Jan 16, 2013 6:31PM
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all the gun laws in the world will not prevent criminals from getting them, it will just give more money to the black market and one more thing to be smuggled in at a higher rate than normal from mexico. just as prohibition didn't stop anyone from drinking gun control will end up the same way. I don't know why we keep blaming the gun when it is the person standing behind it that is the problem.

 

EVIL ALWAYS FINDS A WAY... IF SOMEONE IS DETERMINED TO KILL, THEY CAN GET THE MEANS AND IT IS ALMOST ALWAYS ILLEGALLY.

 

i am a gun owner and my kids are EDUCATED about them, the damage they do, how they work and that they are not a toy. If children or anyone else gets a firearm from someone's house, the owner/adult is a fault, that's why gun safes that lock with combos are available for sale and that is what trigger locks are for (which you can get from your local law enforcement office.

Jan 16, 2013 6:12PM
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A Gun in Hand is Worth Two in the bush.
Jan 16, 2013 6:01PM
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Bought one last week. Sold it yesterday for a nice profit. Not buying stock anymore, learned the hard way about that. In the last five months i've sold 34 guns, resold them for a 31% profit. Think i might be on to something. Thanks Obama!! 
Jan 16, 2013 6:47PM
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What a pos we have for president. I think rebubs. should find out where obama supporters are. Find them and beat them for being traitors. Kinda like giving out addresses of gun owners.
Jan 16, 2013 8:05PM
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Obama and Biden sold more weapons today than the combined sales forces of Smith Wesson and Sturm Ruger.
Jan 16, 2013 9:02PM
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i would like to know just what in this country is free...because they the government keep taking our freedoms away from us...one by one...and our money little by little...our rights ...our fuel..our property...our healthcare...our jobs..our social security....and our ability to do anything about it...hmmm doesn't seem worth fighting for anything anymore does it...oh beautiful for spacious skies for amber waves of grain for purple majesties above the fruited plain...america america etc. etc.
Jan 16, 2013 8:21PM
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So it's racist to ask people for ID to vote, but background checks, I'm assuming ID, etc, for weapons are ok in order for one to exercise their constitutional rights?
Jan 16, 2013 8:30PM
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time to change our name to the communist states of america, ted nugent where are you.
Jan 16, 2013 8:01PM
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Strong background checks....YES
National Identification.............YES
Requiring completion of a certified training course prior to purchase....YES

Legislating the control of firearms to eliminate the random violence of a deranged person (who took the guns from a legal owner) makes no sense. Criminal elements will always be able to find guns without going through all the "proper channels" that the government wishes responsible citizens to go through. All this is puffery to give the appearance that legislators are "doing something about the problem".

The best form of gun control is the training of a responsible person in the safe handling of the gun!!

Jan 16, 2013 9:09PM
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I guess according to most bloggers here, we just have to except the fact that our 5 and 6 year old children will be murdered at school, our citizens will occasionally be slaughtered at the movie house and thousand of others will die each year from Fire Arms. Murder and violence is just the American way, this is why we have 5% of the worlds population and 25% of the worlds prison population.

Progressives believe we can do better than this, they believe we can have a safer more secure culture where children aren't afraid to leave there homes and go to school, like in most other countries.

Conservatives believe this is the best we can do, the right for anyone to have a fire arm outweighs the safety of our selves and our Kindergarten children, they believe it's all right to send your children to school, knowing they may never return.

What do you think ?

Jan 16, 2013 8:49PM
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John lennon sang, Happiness is a Warm Gun, to bad we can't ask John if that warm gun made him happy or dead.
Jan 16, 2013 5:49PM
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A gun in the hand of a little loser makes him feel like John Wayne.
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