Some of the worst fears of anti-gun proponents were purportedly realized this weekend, when U.K. police raided a suspected gang house and found a 3-D-printed plastic magazine and trigger. When Defense Distributed launched its all-plastic Liberator gun earlier this year, it was argued that such weapons would do more than just democratize gun ownership; it would make easily concealable weapons part and parcel of every criminal's arsenal. And here was proof it was occurring.
While both Smith & Wesson Holdings (NASDAQ: SWHC ) and Sturm, Ruger (NYSE: RGR ) barely took notice of the birth of a new weapon, doing all they can to be ready to meet the outsized demands for guns from the public, there were holes in the logic being used.
First, an all-plastic gun ain't cheap. While 3D Systems makes consumer versions of its printers that go for around $1,000 and there are open-source models offered for even less, it still takes a relatively high-end printer with certain specifications -- Defense Distributed needed a special one made by Stratasys that cost $8,000 used -- to treat the plastic so it can withstand the forces of an exploding projectile.
And the consumables that go into it aren't inexpensive, either. In all, the plastic-gun maker manufactured a working gun for around $10,000 that someone could buy for just a couple hundred bucks.
Yet as I also noted at the time, criminals aren't pursuing lawful channels as it is in weapons acquisition, and the technology, while very cool at this stage, isn't ready for prime-time mass distribution. No doubt it will come one day, but we're not there yet.
As it turns out, the Manchester police department has since downplayed the significance of the plastic parts they seized. Rather than formative pieces of a gun, they're likely parts for the printer itself. Oops. Experts have said the consumer-level printer the alleged gang members had might be able to print what looked like a gun, but wouldn't be able to function like one. You can buy cheaper props at the local dollar store than going through the expense of trying to make your own.
Which is why Smith & Wesson and Ruger pay the plastic guns no mind. Backlog at both companies is running at record levels.
Like the FBI, which emphasizes that gun background checks don't equate to a 1-to-1 ratio of anticipated gun sales, both Ruger and Smith & Wesson advise not to think that a runaway backlog will translate into future sales. Indeed, starting with its fiscal 2014 earnings, the latter no longer reports backlog on a quarterly basis. But it's also true that you can infer that if a bunch more people are going through the process of getting checked out before purchasing a gun, a good portion of them will follow through and actually buy one.
Plastic, 3-D-printed guns aren't a threat to the gunmakers, and they shouldn't be a concern for orderly, civilized society. They'll continue to make headlines, no doubt, even in this instance where it's unwarranted, but investors would do well to ignore the polemics and stay targeted on the growth potential of those who turn cold steel into hot sales.
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