There were more mass shootings in the U.S. In 2015 than there were days in the year. The shootings, defined as incidents in which at least four people are wounded, have sparked front-page editorials and demands from politicians for stricter gun control. They’ve also been a boon for gunmakers.
Smith & Wesson’s (SWHC) stock soared by 151% in 2015, making it the 15th-best-performing large-cap company as of mid-December and adding some $790 million to its market value. Competitor Sturm Ruger & Co. (RGR) didn’t do too shabbily either, posting a gain of about 70% for the year. Black Friday gun sales, as measured by FBI background checks, were the highest ever for a single day, surpassing 185,000 sold.
How does that happen? Calls for stricter controls lead firearm enthusiasts to stock up—most gun owners have more than one type (the average gun owner has eight). Brian Ruttenbur at BB&T Capital Markets likens it to shoe shopping: “If you have a pair of pumps, you still want a pair of running shoes.” Others see dire headlines and buy guns for self-defense, leading to an uptick in first-time purchases too. Says Ruttenbur: “The No. 1 driver of these spikes is fear.”
A version of this article appears in the January 1, 2016 issue of Coins2Day with the headline “The Year of the Gun.”
