The Sturm, Ruger & Company Inc. (RGR) gun company’s stock dropped in price from highs in August 2020, but over the past year, the company has also shown a 52 percent rise in stock price, to $69.54 in trade on January 5, 2021. The organization is impacted by market-wide variables that are expected to continue in the next two trimesters.
The U.S. presidential election, and the victory of the Democratic nominee, the COVID-19 issue, the mass protests, have all been a cause of growth in the shares of businesses supplying weapons, explosives, and associated goods.
Sturm, Ruger also became a winner, when the firm launched popular new goods on schedule, such as the Ruger-57, which was given the Golden Bullseye Award title of Best Pistol of the Year.
Sturm, Ruger’s revenue rose by 53 percent year-on-year in the third quarter and earnings improved fivefold. Around the same time, the management of the organization claims that elevated demand is still sustained. This could be a product of U.S. concerns that the Democratic Party would seek to limit access to guns.
This is a popular media notion, although Republican President George W. Bush issued the last big ban in 1989. He banned semi-automatic assault rifles from being imported, the most mass-produced category in the United States of long-barreled rifled weapons with high profitability. However, in 2015, under Democratic President Barack Obama, a full ban on the selling of such guns and high-capacity magazines was promoted in Congress. The ban has possibly been linked to the Democratic Party since then.
In any event, 2020 was a successful year for Sturm and Ruger, and favorable trends are expected to continue in the next two quarters. About 7.7 million Americans bought weapons for the first time in 2020, according to the National Shooting Sports Organization, and more than 19 million sales orders were confirmed, meaning the number of prospective buyers is high, even relative to long-term trends.
Demand was so big that there were several vendors running out of stock. Dealers from Sturm and Ruger also run out of stock, allowing the firm to deny discounts or give a nominal discount. In 2021, strong sales will continue, as many individuals have not had time to purchase what they want. Moreover, during the election campaign, Joe Biden spoke about new bans and regulatory hurdles for owners and first-time buyers in particular. Barack Obama did pledge the same, however, but the resulting legislation was not enacted in 2015.
Sturm, Ruger & Company, Inc.’s (RGR) gain over the past week remained 4.65% raising its market capitalization to $1.21 billion.