The gun industry has been flying high since Barack Obama was elected president. Fear that the liberal Democrat would pass restrictive gun legislation sent people to gun stores in record numbers, ostensibly so they would have something for Obama to "pry out of their cold dead hands."
That legislation never came, but if public sentiment is an indication, new rules could be on the horizon. A new Harris Poll shows that 77% of Americans believe that firearms should come with some sort of restriction while only 14% believe there should be no limitations.
How well is the gun industry doing?
Sturm Ruger (NYSE:RGR), the largest publicly traded gun company in the country, has 2013 sales of f $688.3 million up from $491.8 million in 2012. The company had EBITDA of $195.7 million, which increased 54% from 2012's EBITDA of $127.1 million, according to an earnings release.
Rival gun-maker Smith & Wesson (NASDAQ:SWHC) had $587 million in sales in its fiscal 2013, up from $411 million in 2012, according to the company's annual report. The company also reported it had a backlog that exceeded its yearly manufacturing capacity.
Gains were not unique to Ruger and Smith & Wesson. The number of background checks performed -- a figure used to predict gun sales -- has risen steadily since Obama took office.
In 2005, there were nearly 9 million background checks performed. In 2008, the year before Obama took office, there were 12.7 million background checks, according to the FBI. "Through the first 11 months of 2013, that figure totaled more than 19 million, only about 500,000 shy of the total for all of last year," Huffington Post reported. Final 2013 numbers are not posted on the FBI's "Fact Sheet" page on the National Instant Criminal Background Check System.
Even the gun-buying public supports some laws
The Second Amendment to the Constitution of the United States -- the one about the right to bear arms -- has been a political hot button that few politicians are willing to openly oppose. Even massive tragedies involving guns like the 2012 shooting at Sandy Hook Elementary School in Newtown, Conn., where 20 children were killed, and the 2007 Virginia Tech massacre during which a student gunman killed 32 people have not led to changes in gun laws.
Still the Harris Poll showed that many Americans believe the Second Amendment does leave some room for interpretation. When presented with the text of the Second Amendment and asked whether it does or does not support a series of rights and regulatory powers, strong majorities believe it supports a state militia's right to own firearms (74%), any citizen's right to own firearms (68%), and a state's right to form a militia (65%). A slim majority (55%) also believes it grants states the right to regulate the ownership of firearms among its militia, while half (50%) believe it empowers states to regulate firearm ownership among its citizens overall, the poll showed. The poll also showed that 59% of people do not believe the federal government has the right to regulate who can own firearms.
Still that's 50% of citizens who believe that states have the right to regulate guns and 41% of the American people who believe the federal government can do so. Neither is a convincing figure, but the poll shows there is room for debate.
Take away the absolutes
"When provided with three separate statements, a vast majority of Americans (77%) – including two-thirds (68%) of Conservatives and three-fourths (75%) of Republicans -- feel that Americans should be allowed to purchase and/or own firearms, with some restrictions," Harris reported. "Only 14% believe Americans should be allowed to purchase and/or own them without limitation while just one in 10 (9%) feel Americans should not be able to purchase and/or own firearms."
If presented with rational choices rather than political fear-mongering ("Obama wants to take away your guns," "The Tea Party is forming its own well-armed army") then Americans show a willingness to make sensible decisions. The vast majority of the public -- 91% -- support legal gun ownership in some fashion, so it's not like the vast majority of the country wants guns outlawed or even heavily regulated. It does seem from these numbers that if 77% of the country supports some level of restriction -- which we already have in most states -- that we should as a nation be debating sensible gun policy without resorting to political rhetoric.
Guns are money
Guns and the debate over the Second Amendment have not only been good for gun companies, they have been good for politicians on both sides of the aisle. Republicans can raise money with the idea that Democrats are going to take away all guns and Democrats can raise money on the idea that the GOP wants to give machine guns to toddlers. There are probably politicians on both side who actually want to do those things, but they are not the majority and this survey shows that they clearly don't speak for the people.
The school shootings and other tragedies in which guns were involved should force us into a debate about what sensible gun policy is, and as a country we should be open-minded enough to find a middle ground. The answer may be simply enforcing existing laws or taking small steps like improving background checks.
The solutions need not be extreme and they need not be bad for the gun industry (and some could even be good for it, as added technological safeguards could mean added revenue). It seems unlikely that 77% of Americans could agree on who should win Dancing with the Stars, so when we have that strong a consensus on a topic this divisive, our leaders should actually lead and help the nation find the right balance between freedom and safety.
Daniel Kline has no position in any stocks mentioned. He has owned Sturm Ruger in the past. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.