Sales of Assault Rifles Continue to Skyrocket
Following the killing of 26 people, including 20 children, in Newtown, Conn., the renewed calls for control of semiautomatic weapons known as assault rifles, and large magazines for these weapons, have led to booming sales of the weapons at U.S. gun shops. A proposed ban on such weapons and their high-capacity magazines is likely to be introduced in the U.S. Senate before the end of January.
One version of the proposed legislation calls for reinstatement of the 1994 ban on sales of certain semiautomatic rifles, handguns and shotguns, as well as magazines that hold more than 10 rounds of ammunition. President Obama has stated that he will support a ban on these weapons, and that is very likely the driving force behind the high sales.
Whether any such legislation has a chance of making it through either the House or the Senate is a different matter, but gun buyers are taking no chances, lining up 20-deep at some stores, according to a report at CNNMoney.
Gunmakers Smith & Wesson Holding Corp. (NASDAQ: SWHC) and Sturm, Ruger & Co. (NYSE: RGR) have seen their share prices drop sharply since the Newtown shooting. Ammo maker Alliant Techsystems Inc.'s (NYSE: ATK) shares have risen slightly. For the year, though Smith & Wesson's shares are up about 87% and Sturm Ruger's shares are up more than 30%.
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