Smith & Wesson stock opened near an all-time high on Friday after five police officers were killed and seven were injured in a shooting in Dallas. The gunmaker’s stock opened at $29.75 a share.
Earlier this year, the stock hit a record high on 18 March, trading at $30.44 a share. That day it closed at an all-time high of $29.37.
Stocks for Smith & Wesson rose about 3% on Friday while stocks for fellow firearm manufacturer Sturm Ruger went up by 5%. The shares surged in anticipation of higher gun sales due to fears of stricter gun control policies following the worst mass shooting of police in US history.
In addition to shares of gunmakers, shares of Taser and Digital Ally also surged on the news. The two companies make wearable video cameras worn by US police, and Taser also makes electroshock weapons used by some police.
Earlier this week, the investment firm Cowen urged its clients to buy Smith & Wesson stock, citing a surge in firearm background checks. More than 2.1m background checks for gun sales were conducted by the FBI in June. In June 2015, by contrast, the FBI conducted about 1.5m such checks. June was the 14th straight month in which the number of firearm background checks reached a record high for the month.
According to Cowen’s Cai von Rumohr, June’s background check surge was a reaction to the killing of 49 people during a shooting at Pulse nightclub in Orlando. He attributed it to “gun owners buying [Modern Sporting Rifles] in anticipation of possible purchase restrictions, and handguns for personal safety”.
For the past four years, mass shootings have been followed by calls for tighter gun control and spikes in the value of Smith & Wesson stock.
Last month, Smith & Wesson announced that its annual profits reached $293.8m, a 50% increase on last year’s figures. The increase was attributed to surging gun sales following a wave of mass killings. Over the past 12 months, firearms accounted for $657.6m of company’s sales. Overall sales reached $722.9m – an increase of 31% from the year before, the company announced.
Smith & Wesson’s sales have risen more than 200% since Barack Obama was elected president. In the year to date, shares of Smith & Wesson have surged 32% and those of Sturm Ruger 13%.
