Obama Wins, Gun Stocks Surge

Photograph by Whitney Curtis/Getty Images

A display of shotguns during the NRA Annual Meetings and Exhibits in St. Louis, Missouri.

Just another measure of a nation coming together in harmony following a divisive election:

Smith & Wesson Holding Corp. (SWHC)
climbed the most in two months to lead a rally among firearms manufacturers as traders speculated that President Barack Obama’s re-election will spur gun sales, Bloomberg’s Tim Catts reports.

Smith & Wesson, a maker of pistols and rifles, jumped 7.8 percent to $10.20 at 11:51 a.m. in New York following an 11 percent gain that was the biggest in intraday trading since Sept. 7. Sturm Ruger & Co. (RGR) rose 5.5 percent to $47.10.

Investors are wagering that more Americans will buy guns after the win by Obama, who said last month he would consider reintroducing a ban on civilian purchases of military-style assault weapons. Firearm sales have grown at 10 percent annually since 2008, when Obama was elected, compared with a 7 percent rate from 2001 to 2007, according to Benchmark Co.

“While we maintain our view that these political sales do not represent the entirety of recent firearms sales growth, we expect that with President Obama’s re-election these sales could continue well into his second term,” Mike Greene, an analyst at New York-based Benchmark, wrote in a note to clients today.

Smith & Wesson, based in Springfield, Massachusetts, more than doubled this year through yesterday, while Southport, Connecticut-based Sturm Ruger gained 35 percent. That compared with an 11 percent gain for the Russell 2000 index. Greene has buy ratings on both stocks.

See the full Smith & Wesson report at Bloomberg.com. 


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