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Uvalde School Shooting Prompts Record Gains for Gun Stocks

Shares of Sturm, Ruger & Company, Inc. and Smith & Wesson post sharp rises following killing of 19 elementary school students and two adults.
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Among the many sad realities in the wake of Tuesday’s mass shooting at a Texas elementary school is that gun stocks tend to rise in the wake of such killings.

High-profile mass shootings at schools draw widespread media and political attention and typically spark calls for increased regulation of guns and ammunition. Those in turn tend to give rise to short-term surges in sales to gun fans out of fear of losing easy access to weapons.

On Tuesday an 18-year-old man armed with two weapons and several high-capacity magazines barricaded himself in a classroom at the Robb Elementary School in Uvalde, Texas where he shot and killed 19 students and two adults. Border police eventually entered and killed the suspect.

The pattern of higher gun company share prices in the wake of school shootings can be seen in the aftermath of 10 incidents in the past five years.

Shares of Smith & Wesson Brands, Inc.  (SWBI) - Get Smith & Wesson Brands Inc. Report rose 70% of the time on the day of those shootings and 60% of the time on the day after, based on an analysis by TheStreet.com. In the case of Sturm, Ruger & Company, Inc.  (RGR) - Get Sturm Ruger & Company Inc. Report, shares rose 60% of the time on the day of a shooting and 50% on the day after.

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The median rise for Smith & Wesson is 1.78% on the day of a shooting, and 1.04% on the day after. The median rise for Sturm, Ruger is 0.45% on the day of a shooting, and 0.15% on the day after.

While share gains in gun stocks on Tuesday were modest, the day-after response was strong. That may be because the severity of Tuesday’s killings only became clear later in the day after the markets closed..

Smith & Wesson shares rose 1.1% on Tuesday, but added 6.9% on Wednesday as more horrific details emerged. That was by far the biggest day-after-a-school-shooting gain for the stock in any of the 10 cases considered.

Shares of Sturm, Ruger actually slipped 0.1% on the day of the Uvalde shooting. On the day after, however, the stock rose 4.12% which was also its biggest gain on the day after a school shooting in the past 5 years.

Shares of both gun makers continued to trade higher on Thursday.