Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

If You Put $1,000 Into Sturm, Ruger Stock Last January, Here's How Much You'd Have Now

By Rich Duprey - Dec 10, 2020 at 9:56AM

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

Unprecedented demand for guns has been lighting up the firearms industry.

The immediate future for Sturm, Ruger ( RGR -0.03% ) is exceptionally bullish. Investors can look forward to seeing high sales, high profits, larger dividend payments, and a stock price that's likely to shoot out the lights next year.

Yet although 2020 started off with the same optimism, you might be surprised to find out how much money you would have right now if you had put $1,000 into Ruger on Jan. 2.

Man shooting a target at a gun range

Image source: Getty Images.

A tinder box of opportunity

Gun sales came out of a three-year slump with a vengeance and inventory at Ruger's distributors was mostly depleted. Because Ruger doesn't sell firearms directly to the public, but rather only to federally licensed dealers and retailers, low inventory levels with growing demand were a perfect combination to send sales soaring.

Ruger entered a presidential election year as contentious as 2016 had been, but with a pandemic, a shutdown of the economy, and resources suddenly going scarce added to the mix. Riots and civil unrest broke out in major cities leading some politicians to call for defunding the police.

Consumers raced to the gun stores to arm themselves, and the National Shooting Sports Foundation says 7.7 million people bought their first gun this year as they sought to take protection of family and property into their own hands.

Ruger sales surged 53% and profits rocketed 500% higher amid "unprecedented demand." Its stock followed, nearly doubling in value by August, though it has steadily declined since. While a $1,000 investment would have turned into $1,900 at its peak, today it would be worth only $1,333, or 30% less.

It's still a 33% gain and handily beats the S&P 500's performance, yet it's still a deeply discounted stock heading into the new year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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.
RGR
$71.43 (-0.03%) $0.02

*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 service.

Stock Advisor Returns
673%
 
S&P 500 Returns
142%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2021.

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

Our Most Popular Articles

Premium Investing Services

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