SAN FRANCISCO – Shares of U.S. gun makers have surged in the wake of the massacre of 14 people in California last week, following a pattern that has grown more common in recent years when high-profile mass shootings have spurred firearms sales as well as calls for gun control measures.
Since last Thursday’s shooting in San Bernardino, California, the deadliest burst of U.S. gun violence in three years, Smith & Wesson shares have surged about 17 percent, compared to the S&P 500’s 1 percent loss. Sturm Ruger shares have gained about 10 percent.
Shares of Smith & Wesson Holding Corp. have soared 126 percent this year while Sturm Ruger & Co. shares have surged 67 percent.
With mass shootings piling up, Democratic candidates in the 2016 presidential election campaign have pushing for new rules to limit gun purchases. Calls for gun control in the past have led some people to buy more firearms out of fear that limits are coming.
“It’s not the shooting, it’s the politicians,” said Brian Ruttenbur, an analyst at BB&T who covers shares of gun makers. “There are concerns you are not going to be able to protect yourself moving forward because of restrictions.”
Gun sales have also gotten a boost from worries about crime following urban unrest over the past two years in Ferguson, Missouri, and other cities where residents protested police killings of young black men, said Ruttenbur.
Over the past five years, Smith & Wesson has climbed 428 percent, dwarfing the S&P 500’s 68-percent increase.
After the bell on Tuesday, Smith & Wesson posted results for the October quarter that beat analysts’ expectations and raised its outlook for the rest of its fiscal year.
Gun manufacturer shares have also risen in the days following previous high-profile mass shootings. One notable exception was the 2012 shooting at Sandy Hook Elementary School in Newtown, Connecticut, that led to the death of 28 and stepped up the debate over gun control.
In the day after that shooting, Smith & Wesson’s stock dropped 5 percent, and it lost 13 percent through the following week.