This Is Big News for SWHC Stock
The number of background checks hit a new record in January, despite attempts by the Obama Administration to crack down on gun sales. The news is part of a growing market for firearms and related products that is unequivocally bullish for Smith & Wesson Holding Corp (NASDAQ:SWHC) stock.
On Wednesday, the FBI reported it performed more than 2.5 million gun background checks last month, a record-high for the month of January. This follows a strong number in December, when the FBI checked the backgrounds of 3.3 million soon-to-be gun owners. This was the highest number since records started being kept in 1998. (Source: “NICS Firearm background Checks,” FBI, last accessed February 3, 2015.)
Despite all of the government’s efforts to curb arms sales, gun sales have been growing. Since 2009, the production of firearms in the U.S. has increased 140%, from less than 4.5 million to more than 10.8 million units. Imports have also increased and in 2013, at 5.5 million units, they hit a 30-year record. (Source: “Gun production has doubled under Obama,” The Hill, July 23, 2015.)
The trend has been a boon to Smith & Wesson stock. The company’s gun sales have far exceeded expectations. The trend has not shown any signs of changing, regardless of how sincere the President’s pleas for gun control might be.
SWHC stock may not be at its January 5th peak of $25.86, when President Obama made his latest call for increased gun control, but Smith & Wesson is still trading at more than $21.00 per share. This is in the stock’s high range for the past 52 weeks. Smith & Wesson reached its record after strong earnings estimates for the third quarter and for fiscal 2016, ending in late April. (Source: “Here’s Why Shares of Gunmaker Smith & Wesson Are Jumping,” Fortune, January 5, 2016.)