Firearms Sales Have Skyrocketed in 2021 Compared to Previous Years

Mark Hake

Large numbers of people are buying firearms, according to recent FBI data. This activity in 2021 has skyrocketed in 2021 compared to previous years.

The NICS database, which stands for the National Instant Criminal Background System, established by the FBI, has a report on the top 10 highest days of NICS checks since 1998. This is the check that people who want to own a firearm must pass before buying a firearm at a store licensed as a Federal Firearms Licensee (FFL).

The most recent report shows that of the top 10 highest check days in the last 22 years, 6 of them have occurred during 2021. The other four were for 2 days during 2020, and 1 day each in 2019 and2017.

This implies that people are applying to own firearms at record levels during 2021. To have 6 of the top 10 days in the last 23 years occur during 2021 means that people are flocking to buy firearms.

The same thing occurs in the database for the top 10 highest check weeks. The report shows that 6 of the top 10 weeks in the last 23 years from Nov. 30, 1998, to Oct. 31, 2021, were during 2021. The other highest weeks were in 2020 and 2012.

First-Time Buyers

This data started showing up in late March 2021. For example, March 27, 2021, was the largest day, when 236,295 background checks were sent through the NICS system.

National Public Radio wrote that "First-time gun owners, young and old from across the country, are helping to push record levels of gun sales."

The article quoted a number of gun store owners, including one that said that they are facing an "avalanche" of buyers. The NPR article said that the pandemic and "civil unrest have pushed customers to feel they must take control of their families protection."

Firearms Manufacturers Sales Up

Another indication of this boom in firearms sales is the fact that two of the largest firearms manufacturers are experiencing huge sales gains. The two include Sturm, Ruger & Company, listed on the NYSE under symbol RGR, and Smith & Wesson Brands, listed on NASDAQ under symbol SWBI. Their market capitalizations are $1.3 billion, and $1.1 billion, respectively.

For example, during Q3, Sturm, Ruger & Co experienced a 22.3% gain in sales over last year, in spite of a one-week shutdown during July. The CEO, Christopher J. Killoy, said that the company shipped all the firearms it built during the quarter without the need to aggressively promote or discount their firearms.

Similarly, Smith & Wesson reported that for its most recent quarter ending July 31 sales rose 19.5% year-over-year. In the last two years, its compounded sales growth was 170%.

Both of these companies are also very profitable now. Analysts surveyed by Seeking Alpha show that Sturm, Ruger is forecast to make $8.57 per share in earnings. This will be 69.9% higher than the $5.09 in earnings per share made last year. Smith, Wesson is forecast to make 11.5% higher earnings, according to Yahoo! Finance analyst surveys.
Culver City, CA - gun store - people lined up to buy firearmsNPR

Firearms Checks Up 40% Year over Year

According to the latest October data from the NICS, so far this year 33.06 million people have applied for background checks. This is 2.8% higher than the same figures as of last year when 32.13 million went through checks.

Moreover, this puts 2021 on a path to exceed the 39.695 million who received checks last year. It is important to keep this in perspective. For example, in 2019, only 28.369 million went through NICS background checks, and 26.181 million in 2018. In fact, in 2010, only 14.409 million went through checks.

In other words, in the past 2 years, background checks have skyrocketed 39.9% over 2019 and up 51.6% over 2018. This assumes that background checks will equal the high levels in 2020, but we have already shown that as of Oct. 31, they are up 2.8%.

The bottom line here is that people are flocking to buy firearms.

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This is not financial advice and you should not rely on my analysis to buy or sell any stock, security, or crypto, as I am not undertaking to induce you to buy or sell securities.

I am relying on the “publisher’s exclusion” in the Investment Advisers Act of 1940 to provide this information without any personalized or individualized investment advice.

This represents my analysis of Sturm, Ruger (RGR), and Smith & Wesson Brands (SWBI) and it is not meant to provide you with specific advice in your own situation. I do not own either stock right now, but I may buy it in the near future. Your own situation could be different and this is not a recommendation to purchase the stock.

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Mark Hake is a financial analyst, investor, and Chartered Financial Analyst (CFA). He writes about US and foreign stocks as well as cryptos, hedge funds, and private equity. He previously ran his own hedge fund, investment research firm, and acted as CFO for a fintech startup. He focuses on finding value, arbitrage, and hidden asset opportunities.

Phoenix, AZ

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