Gun Stocks Get Bump After CA Judge Overturns Assault Weapons Ban; Background Checks Break New Record
ZeroHedge
Shares in firearms related stocks nudged higher on Monday after a federal judge in California overturned the state's ban on assault weapons late last week (which the state has 30 days to appeal before it takes effect on the 4th of July).
Vista Outdoor, American Outdoor Brands, Ammo Inc., Sturm Ruger, Smith & Wesson and Clarus all saw gains in early trading, while the S&P 500 edged down around -0.2%, according to Bloomberg.
"As a leading manufacturer of ammunition, I would imagine that anything that removes roadblocks to consumers purchasing firearms and ammunition would be a positive for Vista Outdoor (VSTO) – especially with management already recently confirming an order backlog that stands at ‘multiple’ billions," said B. Riley analyst Eric Wold, who covers the stock and rates it a buy.
"The accessories and ammunition that would be purchased from VSTO could be viewed as a more valuable recurring revenue situation."
The positive action in firearms also follows a Friday report that FBI background checks hit nearly 4.7 million in the month of March, the most since records began 20 years ago - a 77% increase vs. March 2019.
Background checks also hit a new record for the month of May.
According to CNN a record number of those purchasing guns are first-time buyers.
"We've also seen, in times of civil unrest, that we see people go out and say that they need to protect themselves," said criminology professor, Jack McDevitt in a statement to CNN. "So they're going to buy guns to protect themselves."
The only question - will they learn to use them?