Bullets & Ballots: Tracking Gun Stock Performance Across Biden And Trump Eras

Shares of Smith & Wesson Brands Inc SWBI gapped up over 20% on Friday following its fourth quarter earnings print. The move comes 884 days into Joe Biden’s presidency, giving Benzinga an intriguing backdrop to compare the performance of other gun stocks over the same time frame during the presidencies of Biden and Donald Trump.

First, we’ll get into Smith & Wesson's earnings.

By The Numbers: The Massachusetts-based gun manufacturer issued earnings of 32 cents per share, which beat a Street estimate of 27 cents, on revenues of $144.777 million, which beat the $138.38 million consensus estimate.

While gross margin contracted to 29.0% from 39.8% a year ago, the company’s adjusted EBITDA declined to $30.3 million from $57.7 million.

Despite Smith & Wesson’s year-over-year decrease in revenues and margins, the company’s board of directors raised the quarterly dividend per share by 20% to $0.12, which is set to be paid on July 27.

Gun Stock Performance Under Trump And Biden: Some are aware that the performance of gun stocks often respond to perceived threats to gun ownership rights. It's a pattern that aligns more with Democratic presidencies or potential Democratic victories due to the perceived favor of stricter gun control laws.

On the other hand, any perceived threat tends to diminish when a Republican is in office, which leads to a potentially underwhelming performance of gun sales and, in turn, gun stocks.

Has this actually been the case though? Check it out below.

Eight-hundred-and-eighty-four days into Trump’s presidency, from January 20, 2017 to June 23, 2019, the performance of major gun stocks were as follows:

Olin Corp OLN: ($26.64 to $21.62) -18.82%
Ammo Inc POWW: ($3.90 to $2.10) -46.15%
Vista Outdoor Inc VSTO: ($27.78 to $8.49) -69.42%
Sturm Ruger & Company Inc RGR: ($50.65 to $52.88) +4.41%
Smith & Wesson Brands Inc: ($15.47 to $6.93) -55.16%

All of the stocks were drawn down by an eye-popping amount, outside of Strum Ruger. In contrast, here’s how the same stocks fared 884 days into Biden’s presidency, from January 20, 2021 to June 23, 2023:

Smith & Wesson Brands: -27.68% ($18.79 to $13.58)
Sturm Ruger & Company: -24.18% ($70.09 to $53.14)
Vista Outdoor: -4.38% ($28.46 to $27.21)
Ammo Inc: -67.39% ($6.47 to $2.11)
Olin Corp: +81.58% ($26.43 to $47.97)

What if you invested $1,000 in the above gun stocks when Biden was elected? How much do you think you’d have? Read it here.

Over the entire course of Trump’s presidency (January 20, 2017, to January 20, 2021), however, we saw some stocks record steep gains:

Smith & Wesson Brands: +42.85% ($14.54 to $20.77)
Sturm Ruger & Company: +42.7% ($50.65 to $72.28)
Vista Outdoor: +0.47% ($27.78 to $28.25)
American Outdoor Brands: +28.58% ($15.50 to $19.93)
Ammo Inc [Feb 7, 2017 IPO]: +81.28% ($3.90 to $7.07)
Olin Corp: +5.74% ($26.64 to $47.90)

With just 17 months until the presidential election, investors should brace for more activity on the gun stocks front.

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