Despite the torrent of recent negative press from the mainstream media, gun manufacturers stocks have surged in recent weeks.
Negative publicity and threats to a public company’s marketability normally decrease its stock value. But not with gun and ammunition stocks.
After violent episodes, these stocks usually spike.
Following the Orlando, Florida, massacre at Pulse nightclub, shares of both Smith & Wesson Holding Corp. (ticker: SWHC) and Sturm, Ruger & Co (RGR) rose 10 percent. Ammunition maker Vista Outdoor (VSTO), the specialty chemical company Olin Corp. (OLN) that owns the Winchester gun brand, and sporting and hunting goods retailer Cabela’s (CAB) rose as well.
Sales also rise when a president starts talking about tighter gun control, which leads to more gun sales. After President Barack Obama spoke about tighter gun laws in 2015 following a year in which U.S. mass shootings claimed the lives of 475 people, a record-high 3.3 million people applied for gun background checks in December, with 2.5 million more in January and 2.6 in February, according to FBI reports.
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