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

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

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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.

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Sturm, Ruger & Company, Inc. Stock Quote
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RGR
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