Gun stocks Sturm Ruger & Co. (ticker: RGR) and American Outdoor Brands Corp. ( AOBC) traded mostly flat on Wednesday after a gunman attacked a group of congressmen in Alexandria, Virginia, leaving House Majority Whip Steve Scalise and four others wounded. Market activity changed little after police assured the public that the lone suspect was in custody.
Scalise, who was shot in the hip and reported stable after surgery, was at a practice for the annual charity Congressional baseball game between Republicans and Democrats scheduled for Thursday. The shooter died after a gunfight with police. Five people were hospitalized, including two Capitol Police officers.
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In the past, highly-publicized mass shootings prompted investors to buy shares of firearm stocks. The logic behind the buying is that these events can fuel calls for stricter gun-control laws. When gun enthusiasts are concerned of more restrictions, they tend to buy more firearms, so these types of events can indirectly result in an uptick in firearm sales.
Smith & Wesson and American Outdoor Brands shares spiked nearly 10 percent the day after the Orando nightclub shooting about one year ago. When Donald Trump won the November presidential election and Republicans secured both houses of Congress, gun stocks declined more than 20 percent in the days following the vote.
The muted response to Wednesday’s shooting may be a sign that investors don’t see the shooting as a market catalyst, focusing instead on firearm market fundamentals. The FBI recently reported a record number of firearm background checks in May, suggesting the industry is bouncing back from the soft period following the election.
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“Current demand is likely bolstered by firearms pricing promotions as well as strong underlying demand from a growing participation base,” D.A. Davidson analyst Andrew Burns says in a report earlier this month.
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Gun Stocks Remain Flat After Congressman’s Shooting originally appeared on usnews.com
