Image: Las Vegas gun show
Getty Images
Attendees check out new models at a January gun show in Las Vegas. Reasons given in the surge in sales range from paranoia about the economy to certainty President Obama will be draconian in his approach to firearms in a second term.
By
updated 9/5/2011 11:25:14 AM ET 2011-09-05T15:25:14

Rick Perry’s emergence as the front runner for the Republican Presidential nomination would seem like a coup for the gun industry. The Texas governor’s enthusiasm for firearms rivals Yosemite Sam’s. He has an A+ rating from the Texas State Rifle Association and packs a laser-sighted Ruger pistol when he jogs. Last year, he famously shot a coyote that threatened his dog during a run. To commemorate his act of valor, the manufacturer, Sturm, Ruger & Co., produced a lightweight, limited-edition “Coyote Special” with the words “A True Texan” emblazoned on the barrel. Collectors snapped them up. Perry would be as ardent a champion of gun rights as has ever occupied the White House.

And yet he still may not do as much for the industry as Barack Obama already has. In the time since he took office, gun sales have soared. The government doesn’t track individual sales. But the FBI criminal background check required to purchase a gun is considered a reasonable proxy, and these have hit record numbers each year Obama has been in office. This year, they’re on track to surpass 15 million for the first time.

Ruger has done especially well. Since Obama’s inauguration the company’s stock price has risen more than 400 percent, making it a better investment than gold, which is up 113 percent. “They’ve been outstanding in offering new products, especially in the concealable handgun segment,” says Jim Barrett, an analyst at CL King who tracks the gun industry and rates the company a “strong buy.”

Bloomberg Businessweek: Glock: America's gun

Analysts anticipated a brief jump in firearm sales after the election as many gun owners, fearful that a new Democratic President would move to ban assault weapons, fortified their home arsenals. “Initially, what spiked were the tactical rifles, the stuff Rambo might use,” says Barrett. As a result, 2009 was “a blockbuster year.”

So was 2010. And so is 2011. The strong numbers go beyond Rambo-type firepower to include the compact pistols that Perry prefers, although joggers and fans of the governor won’t have an easy time finding his signature model. “We were almost sold out before the press ever caught wind of it, and now that he’s running for President the calls have intensified,” says Brent Samperi, sales manager at Hill Country Wholesale, a distributor in Pflugerville, Texas. No one is entirely certain why sales are still surging. “Gun owners don’t like to be surveyed,” Barrett notes.

Bloomberg Businessweek: Rambo rifles for weekend hunters

Dealers and analysts have several theories. One is that hardcore gun enthusiasts fear the lousy economy will set off a crime wave. Another is that political upheaval over the federal debt may lead to riots like those in Greece and London. Still another popular, if paranoid, belief that’s taken hold among gun-rights advocates: that Obama is waiting until he is reelected to separate Americans from their firearms, prompting worried gun owners to stock up in anticipation.

Even as the industry pumps money into the National Rifle Association, which is intent upon defeating Obama, some gunmakers wonder if these fears — and the sales they generate — will dry up if a gun-friendly Republican like Perry wins the White House. Sturm, Ruger & Co. CEO Michael O. Fifer alluded to this concern in a July sales call. “I think half of the people in the firearms industry, if asked, would hope [Obama] is not President, but then will secretly go out and vote for him again,” Fifer said. Talk like that won’t win Fifer any plaudits from the NRA. But it does capture the industry’s strange predicament: If gunmakers work too hard to defeat Obama, they may be shooting themselves in the foot.

The bottom line: Since Obama took office, Ruger’s stock has climbed more than 400 percent, outperforming gold.

Bloomberg Businessweek: A 'bring your gun to work' movement builds

Copyright © 2012 Bloomberg L.P.All rights reserved.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.38%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.40%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 10.87%
10.87%
Cash Back Cards 16.36%
16.35%
Rewards Cards 15.94%
15.92%
Source: Bankrate.com