Please ensure Javascript is enabled for purposes of website accessibility

Why Sturm, Ruger & Company, Inc. Stock Popped 12.9% in April

By Steve Symington - May 1, 2017 at 10:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The gun manufacturer rose along with a key metric for its industry. Here's what investors need to know.

What happened

Shares of Sturm, Ruger & Company Inc. (RGR -2.21%) rose 12.9% in the month of April, according to data provided by S&P Global Market Intelligence, as the company announced significant share repurchases amid encouraging firearm industry developments.

So what

On April 4, 2017, Ruger announced it had repurchased a total of 1.1 million shares of common stock in the first quarter on the open market at a cost of $53.4 million. Ruger used cash on hand to fund the move, and reduced its number of shares outstanding by a whopping 5.7% in the process.

Sturm, Ruger stock AR 556.

Image Source: Sturm, Ruger.

If that wasn't enough, Sturm, Ruger shares continued to rise throughout the month after FBI reported that background checks for potential gun buyers surged in March. This stemmed from concerns that our new firearms friendly presidential administration and Congress would cause gun sales to fall. That might seem counterintuitive, but keep in mind that the threat of anti-firearms legislation tends to serve as a call to action for prospective gun buyers who might otherwise be inclined to wait.

Now what

As it stands, Sturm, Ruger is set to release its first-quarter results next Monday, May 8, 2017. So you can be sure the market will be listening closely to both how it started the year and what investors should expect going forward. But with Sturm, Ruger's share repurchases, as well as the positive indications of the FBI's data, it's no surprise to see that shares of the company's stock popped last month.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sturm, Ruger & Company, Inc. Stock Quote
Sturm, Ruger & Company, Inc.
$64.60 (-2.21%) $-1.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.