© ERIC THAYER / Reuters
SAN FRANCISCO (Reuters) - Sturm Ruger & Co
Shares of Sturm Ruger on Thursday jumped 7.4 percent after the Southport, Connecticut company reported fourth-quarter results that handily beat Wall Street's expectations.
After conservative Supreme Court Justice Antonin Scalia died this month, replacing him has become a major flashpoint between President Barack Obama and Republican lawmakers, the outcome of which could tilt the balance of the nation's highest court on numerous decisions, including gun control.
On a conference call with analysts on Thursday morning, Sturm Ruger Chief Executive Officer Michael Fifer looked beyond the current vacancy to future potential openings should any of the remaining eight justices leave the court.
"I think we'll see a step up in demand if a Democrat wins the election, particularly so if they win the Senate," Fifer said.
"Despite whether President Obama is successful in appointing a Supreme Court justice, it's more than likely, based on age and health, that the next president will get several opportunities, and that could drive concerns about gun rights," Fifer said.
Shares of Sturm Ruger and competitor Smith & Wesson Holding Corp
Democratic presidential front-runner Hilary Clinton has been pushing for new rules to make background checks more comprehensive and close "loopholes" on some kinds of gun purchases. Such calls in the past have led people to buy more firearms out of fear that limits are coming.
Gun sales have also gotten a boost from worries about crime following urban unrest in recent years in Ferguson, Missouri and other cities where residents protested police killings of young black men.
Over the past five years, Sturm Ruger's stock has more than tripled, dwarfing the S&P 500's 45 percent increase.
Those returns lave led portfolio managers to make gun-related stocks major holdings in mutual funds.
"The firearms industry enjoys a sweet spot with the American consumer, and we believe shares of (Sturm Ruger) should be bought," Dougherty & Company analyst Andrea James wrote in a research note following Sturm Ruger's report.
(Reporting by Noel Randewich; Editing by David Gregorio)
This article was funded in part by SAP. It was independently created by the Reuters editorial staff. SAP had no editorial involvement in its creation or production.
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