The actions of the three main firearms manufacturers in the United States earned 329 million dollars (mdd) in the NYSEthe three days after the shooting at an elementary school in Uvalde, Texas, that left 21 dead, including 19 children.
The titles of the ammunition producer outdoor view They gained 10.55% at the end of the week, compared to the price they had on May 24, 2022 -the day of the shooting-, trading at $38.85 each.
The share price of Smith & Wesson, founded in 1852, whose revolvers and pistols are the most iconic in the US market, rose 9% in the same period, to $15.2 each. While the papers of the manufacturer of rifles and pistols Sturm, Ruger & Co. they rose 5.54%, to 67.17 dollars the title.
During those three days, outdoor view increased its capitalization value by 209 million dollars; Sturm, Roger & Company earned $62 million, while Smith & Wesson totaled 58 million dollars.
According to the Department of Alcohol, Tobacco, Firearms and Explosives, in 2020 Smith & Wesson is the number one producer of pistols, with 1.5 million, while Sturm, Ruger & Company placed third in the category; it produces 772,382 firearms a year.
According to analysts, after a shooting in the American Union, the actions of the gun shops in wall street they win. José Luis de la Rosa, analyst at Quantum Dynamicsexplained that it is because consumers “tend to turn to stores to buy weapons, for fear that legislators will impose stricter measures for their sale, and they prefer to buy them before.”
“It is normal behavior, related to the factor of potential scarcity; as in any product, faced with the threat of a possible shortage, demand increases”, said the director of the brokerage.
Risks for the sector
The experts identified as the main risk for these companies in the stock market, that the laws are modified and the purchase of Firearms.
Armando Rodríguez, analyst at Black Wall Street Capitalaffirmed that the main risk is “that more severe restrictions are applied to the acquisition of weapons and that said restrictions include the entire population in general, although that scenario seems unlikely.”
“The only risk would be a cancellation of the second amendment in the United States constitution (it allows citizens to carry weapons) and the prohibition of the purchase and carrying of weapons, although the probability is remotely small,” said De La Rosa, of Quantum.
A “normal” behavior
When the deadliest shooting in the United States occurred on October 1, 2017 in Las Vegas, Nevada, leaving 59 people dead, two of the three aforementioned companies also gained in the stock market in the days that followed.
At the close of the week in which that event occurred, on October 6, 2017, the shares of Sturm, Ruger & Co. and of Smith & Wesson gained 2.95% and 2.03%, while the titles of outdoor view they were down 5.18 percent.
Meanwhile, a week after a shooting at a gay nightclub in Orlando, Florida, in which 40 people were killed – the second deadliest in modern US history – headlines Smith & Wessonrose 10.46%, those of Sturm, Roger & Co. advanced 5.62%, and those of outdoor view they gained 1.25 percent.
The increase in capitalization value of the three companies together during that period was 241 million dollars.
Another shooting in which the same phenomenon has been repeated was that of a high school in Parkland, Florida, on February 14, 2018, which left 17 dead. the papers of outdoor view they advanced 1.63% in the week the shooting occurred; the actions of Sturm, Ruger & Co. grew 0.39%, while those of Smith & Wesson They were motionless.
After the shooting at the Inland Regional Center, in San Bernardino, California, whose balance was 14 people dead. The actions of Smith & Wesson gained 18.05% a week later, those of Sturm Ruger & Companyrose 7.66% and those of Vista Outdoor fell 1.82 percent.
Jacobo Rodríguez, analyst at the investment adviser of Black Wall Street Capitalassured that despite the favorable results in the business market days after the shootings, the movements are “short-term.”
The United States is the country with the highest possession of firearms among the civilian population, with a total of 393 million weapons in the hands of civilians, for a rate of 120.50 weapons per 100 inhabitants, with which there are more firearms than people in the country, according to data from the Small Arms Survey 2018made by the University of GenevaSwiss.
In Mexico there are 16.8 million weapons owned by civilians, for a rate of 12.80 per 100 inhabitants, according to the same source.