Gun Business: Key Indicator Points to Gun Industry Strength
Posted by Kevin Kullman on August 25, 2010 · Leave a Comment
Financial analysts closely track the FBI’s monthly report on firearm background checks as a key indicator of gun sales. This figure doesn’t tell the whole story related to industry performance but much like analysts look at mall traffic to predict retail sales, the background checks usually provide a hint into the strength of firearm purchases. So what do the numbers say?
Basically it suggests that 2009 was a record year for background checks and the latest 6-month year over year comparison confirm that 2010 could set a new record.
| Year | Jan. | Feb. | March | April | May | June | Total |
| 2009 | 1,214,000 | 1,259,000 | 1,345,000 | 1,226,000 | 1,023,000 | 968,000 | 7,035,000 |
| 2010 | 1,119,000 | 1,243,000 | 1,300,000 | 1,234,000 | 1,017,000 | 1,006,000 | 6,919,000 |
The July numbers were just released and show almost a 10 percent gain in July of 2010 compared to July of 2009 (1,062,000 vs. 963,000). If this trend continues 2010 could outpace 2009. Both Smith and Wesson and Strum, Ruger (the only two publicly held gun companies in the U.S. market) reported solid quarterly reports validating the tracking of firearm background checks as an accurate economic indicator of firearm sales. Strum, Ruger reported 2nd Qtr earnings of $0.43 per share compared to analyst estimates of $0.30, while Smith and Wesson outperformed expectations by reporting earnings of $0.08 per share compared to predictions of only $0.04 per share. If these trends continue to grow year over year investors may have to pay close attention to monthly background checks as an opportunity to invest in these firearm companies.
FBI Firearm Background Check Figures November 1998-July 2010
