Gun stocks fizzle on talk of slowing sales

Shares of Smith & Wesson and Sturm Ruger fell after an analyst report Wednesday, but overall gun sales remain higher for year.

By Bruce Kennedy Oct 3, 2012 3:06PM

 Men with toy guns --Leander Baerenz/Digital Vision/Getty ImagesShares of gun manufacturers retreated slightly Wednesday after a report suggested that handgun sales may have slowed last month.


Shares of Smith & Wesson (SWHC) and Sturm Ruger & Company (RGR) were down following word from Benchmark analyst Mike Greene that the number of adjusted FBI background checks for handgun sales grew by just 14.7% in September. That's down from growth of more than 20% in past months.


Those background checks, Greene told CNBC, are made at retail locations before a person purchases a firearm. "You can adjust those checks to remove concealed-carry permits and get a very good proxy for firearm sales," he said. "Just this past June they were up 24.5%, off of a very strong count for the year before as well."


Greene notes that overall firearms sales for the past six months are up more than 20%. In the case of Smith & Wesson, he said, a new management team has recently divested the perimeter security business to focus on the rapidly growing core firearms business.


He also pointed to three factors that are driving firearms sales:

  • Politics. "Before the election, people are buying firearms because they think that if re-elected, President Obama might go after more firearms regulation," he said.
  • Economy. There are concerns that crime rates might go up in a poor economy.
  • Female gun owners. Greene says there is a growing social acceptance of firearms for both self-defense and recreation -- especially among women. The rate of female firearms ownership has gone up "significantly" over the past several years.
Shares of Smith & Wesson were down more than 5% Wednesday to $10.32. Shares of Sturm Ruger were down more than 3% to $47.09.

More from Top Stocks
Tags: RGRSWHC
1Comment
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

112
112 rated 1
270
270 rated 2
444
444 rated 3
693
693 rated 4
637
637 rated 5
692
692 rated 6
615
615 rated 7
498
498 rated 8
265
265 rated 9
126
126 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
TAT&T Inc9
VZVERIZON COMMUNICATIONS9
EXCEXELON CORPORATION8
AAPLAPPLE Inc10
ATVIACTIVISION BLIZZARD Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.