Gun stocks rally as Obama issues new diktats Click to Tweet

Gun stocks rallied for a second day on Tuesday, as investors again bet that new restrictions rolled out by President Barack Obama not only wouldn’t deter sales but would propel them.

Smith & Wesson SWHC, +11.08%  shares surged as much as 14% and Sturm, Ruger & Co. RGR, +6.76% climbed as much as 9%. The moves also comes as Smith & Wesson raised its profit guidance for the April-ending fiscal year.


Help Stop Obama’s Illegal Gun Orders — Sign the Emergency Petition to Demand That Congress Fight Back!

Smith & Wesson shares have surged 180% in the last 12 months, and Sturm, Ruger is up a cool 89%.

Background checks surged 38% in the 12 months ending December, according to BB&T Capital Markets analyst Brian Ruttenbur, who raised his rating on Smith & Wesson to buy from hold.

Ruttenbur said the presidential election and end-of-term potential for regulation will drive fear among consumers.

“As the firearms industry has seen numerous times before, the threat of gun control legislation again appears to be driving near-term retail sales acceleration, as consumers rush to dealers to purchase firearms they believe may one day become unavailable,” added Rommel Dionisio, an analyst at Wunderlich Securities, who lifted his Smith & Wesson price target to $29 from $25.

“We believe such accelerated sales trends are indicative of consumer fears stoked by recent geopolitical events such as the San Bernardino and Paris shootings, and President Obama subsequently calling for tightened gun control in response”…

Source: Gun stocks rally as Obama outlines new measures – MarketWatch