Gun sales have surged to record highs during the coronavirus-lockdown crisis amid worries that surging unemployment could ultimately incite more crime.
Such a trend reportedly could help boost the shares of two companies dealing with firearms.
The federal government conducted 3.7 million background checks on gun buyers last month as many state governments told residents to quarantine in their homes, beating the previous high of 3.3 million set in December 2015, Barron’s reported.
“If this tough economic situation persists, I’m worried people might resort to crime to feed their families,” says a trader in a wealthy town in southern Connecticut who wants to remain anonymous. “Desperate times make people desperate.”
However, Barron’s noted that American Outdoor Brands (AOBC), which owns the iconic gun maker Smith & Wesson, and Sturm Ruger (RGR) could be well positioned for an age of pandemics.
The companies make ARs and other rifles and handguns. Of the two, Sturm Ruger’s stock is the better performer, up about 16% this year. But American Outdoor’s Smith & Wesson brand, which makes an M&P line—short for military and police—may have broader appeal for the home-defense crowd.
To be sure, the FBI's firearm background check system conducted a record number of checks last month, 3.7 million, the most since the system was put in place in 1998, HuffPost reported.
It is a 41% increase from the same month the year prior, signaling an increase in gun sales amid the global coronavirus pandemic, per the report.
"All of our distributors are several days if not a week behind on getting merchandise out of the warehouse," Georgia Gun Store in Gainesville, Georgia, Michael Weeks told HuffPost. "It's like Black Friday every day almost."
There is speculation it was due to the global coronavirus pandemic, but it also coincided with the rise of Vice President Joe Biden to a large delegate lead in the Democratic presidential primary.
Biden accepted the endorsement of former Rep. Beto O'Rourke, D-Texas, who Biden indicated would lead his gun control agenda. O'Rourke has in the past vowed to come to take guns from Americans amid a smattering of mass shooting events.
During the 2016 presidential election season, there was also a large uptick of gun sales, perhaps anticipating a potential stiffening of gun laws.
One of the largest upticks in gun sales occurred December 2012 after former President Barack Obama's re-election and within a year of the Sandy Hook shooting. Last month was a 34% increase from that 2012 high.
"Fear, especially uncertainty, drives gun purchasing for a lot of people," Penn State Altoona professor Lacey Wallace told HuffPost last month. "The number one reason people buy and own guns is for personal protection, so when you're seeing everything in the news about things getting shut down, the virus spreading . . . that's going to bring in a lot of the uncertainty.”
Ammunition sales has already recorded increase, too, per the report.
Ammo.com recorded a 792% increase in revenue for a 39-day period to March 31, compared to the previous 39-day period.
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