Gunmakers' stock rise

Early warning shot

Gun maker Sturm Ruger shares jumped to an all-time high Thursday, after the company said demand was rising so fast that it was suspending new orders until May. Sturm Ruger highlighted that it has received orders for more than one million guns for the first quarter and it could not keep up with demand despite increased production. The company's announcement that it would stop taking orders until it clears an enormous backlog is just one more demonstration that the boom times continue for the American firearms business. 

Sturm Ruger, which makes a wide variety of rifles, pistols and revolvers, also said that it expects to “resume the normal acceptance of orders by the end of May.” Reuters notes that the spike in demand comes in an election year when fears of gun control regulations resurface. In 2009, gun sales had shot up after Barack Obama won the U.S. presidential elections and firearm enthusiasts rushed to stores, fearing he would tighten gun control. Shares of Sturm Ruger's rival, Smith & Wesson, also jumped as the company is expected to gain market share from Sturm Ruger's suspension of orders. For its part, when it released third-quarter results this month, Smith & Wesson forecast sales of $395-400 million for all of fiscal 2012, up from an already-increased December estimate of $385-395 million.

Sturm Ruger (RGR : NYSE : US$47.93), Net Change: 5.63, % Change: 13.31%, Volume: 1,241,533 Smith & Wesson (SWHC : NASDAQ : US$7.68), Net Change: 0.78, % Change: 11.30%, Volume: 6,235,353

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