Gun stocks slump as background checks fall
NEW YORK, N.Y. — Gun stocks slumped after a Federal Bureau of Investigation report indicated that gun sales slowed in May.
Shares of Smith & Wesson were down 4 percent and Sturm Ruger fell 6 percent in early trading Monday.
An FBI report released last week showed background checks fell 12 percent in May, compared to April.
“May represented a more rapid slowdown compared to our expectations,” wrote Brian Ruttenbur and Corbin Allen, gun analysts for BB&T Capital Markets, in a report for investors.
The analysts lowered their estimates for both gun makers going forward.
The Federal Bureau of Investigation conducts a background check for every gun purchase conducted through a federally licensed dealer, so the stat is considered at proxy for gun sales.
But background checks aren’t a very precise measure of sales, since not all sales are conducted through federally licensed dealers, and because a single background check can represent the single purchase of multiple guns.
Even with this month over month slow down, background checks are still much higher in 2016 compared to 2015, which was a record year.