Coverage: Gun company stocks facing pressure

Gun makers are again the center of a national debate over how to put an end to mass shootings, and their stocks are trading like things are different this time.

Liz Moyer of CNBC.com had the story:

Shares of gun makers follow a similar pattern. They drop in the immediate aftermath of a shooting and are mostly trading higher three months later. But data by a hedge fund analytics tool called Kensho shows the stocks of these companies are reacting differently this time.

Rifle maker Sturm Ruger & Co.’s shares are down more than 7 percent this month, and American Outdoor Brands (the parent of Smith & Wesson) is down more than 18 percent.

Shares of Vista Outdoor are up 20 percent this month. It makes accessories like riflescopes as well as bullets.

An analysis of the five deadliest mass shootings in recent U.S. history reveals that shares of those three companies traded down from the day of the incident to one week later, but not by as much as they are reacting now to the high school shooting in Florida.

Nathaniel Meyersohn of CNNMoney.com reported that Wall Street investors are asking questions to the gun makers:

State Street, a top shareholder in gunmakers Sturm Ruger, American Outdoor Brands and Vista Outdoor, wants to know how the companies “will support the safe and responsible use of their products.”

“We will be engaging with weapons manufacturers and distributors to seek greater transparency,” spokesman Andrew Hopkins said in an email Monday. State Street also plans to watch the companies’ lobbying efforts.

Blackstone, another investment firm, wrote to about a dozen hedge fund managers over the weekend asking for information on their stakes in gun manufacturers and distributors. The Wall Street Journal first reported the request on Sunday.

“We believe we have next to no direct exposure to the firearms industry, but it’s not surprising that we would want to confirm,” a Blackstone spokeswoman said in an email.

Rachel Siegel of The Washington Post writes about how President Donald Trump’s election hurt gun makers:

Trump’s victory seemed like it would bring a boon to gunmakers. Yet more than a year into his presidency, the stock performances of gun manufacturers tell a surprising story: Among the nation’s top companies, three — American Outdoor Brands, Vista Outdoor and Sturm, Ruger & Co. — saw a large drop in the value of their share prices since the day after Trump’s election in November 2016.

America’s deep divisions over guns intensified this month after 17 people — most of them teenagers — were shot and killed at a Florida high school on Feb. 14. Students who survived the massacre have demanded common-sense gun reform from Washington, D.C. Trump and the NRA say the guns, in particular the AR-15 used in the shooting, are not to blame. They point to a breakdown in mental health and law enforcement systems that they say failed to thwart the rampage.

In the days since, companies including Hertz, Delta Air Lines and MetLife have all cut ties with the NRA. And some people have said that investors should steer clear of gunmakers as a statement against the damage done by their wares. Another argument, however, is that America’s biggest gun makers are not the strong investments they once were — badly lagging the otherwise strong market performance since Trump won the presidency.