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Stocks of several US-based gunmakers spiked on Wednesday and then again in the premarket hours of Thursday morning. The rise came close on the heels of US Congress’ official declaration of Joe Biden’s Presidential win and Donald Trump begrudged defeat acceptance.
Smith & Wesson stocks (NASDAQ:SWBI, SWBI:US), the US-based manufacturer of firearms, ammunition and restraints, shot up by almost 1 per cent in premarket hours on Thursday morning (9:05 am ET). On Wednesday, the stock had surged by 18 per cent after pro-Trump supporters’ siege of the United States Capitol Hill, which left four dead and many injured. It closed at a 52-month-high price of US$ 22.5 apiece.
Stocks of other US-based firearms manufacturer Vista Outdoor Inc (NYSE:VSTO, VSTO:US) and Sturm Ruger & Company Inc (NYSE:RGR, RGR:US) also climbed over 15 per cent and 12.05 per cent on Wednesday, respectively.
Sturm Ruger stocks were up by just 0.10 per cent while Vista Outdoor scrips were up 2.06 per cent during premarket trading (9:14 am ET).
Why Are Gunmakers Stocks Rising?
There are two likely reasons for this sudden spike in stock price of firearms manufacturers:
- The shocking display of violence by pro-Trump supporters, who breached the walls of Washington-based Capitol Hill, has likely prompted people to buy fire weapons over protection and defense concerns.
- A Democrat-led US Senate will likely implement tighter gun control legislations, which may impact sales of firearm manufacturers Gunmakers Smith & Wesson, Vista Outdoor, and Sturm Ruger.
Individuals may continue buying or stocking up firearms till Biden’s official swearing-in ceremony on January 20 this year.
In the last one year, Smith and Wesson’s stocks surged by nearly 208 per cent and holds a price-to-earnings (P/E) ratio of 26.7.
Vista Outdoor stocks increased by over 308 per cent in the last one year, while Sturm Ruger scrips gained almost 68 per cent in the same time frame.
