Smith & Wesson gets political…

Just days before the Nov. 4 election, this story began to gain currency: gun sales were surging over fears that Barack Obama would be elected because he would take away everyone’s guns. In the days after the election, similar stories began to appear both in the national media (see here and here) and in regional papers too that all said essentially the same thing. One thing about journalists: we love those trend stories especially when other journalists have already declared it a bona fide trend.

I thought about this as I was skimming through the 10Q that Smith & Wesson (SWHC) filed yesterday. Buried in an otherwise uneventful MD&A was this statement: “M&P 15 sales were helped by a consumer promotion as well as what appears to have been speculation on the outcome of the presidential election.” And, just in case you missed that, a page later, the company adds this: “It appears that political concerns may have temporarily spurred the tactical rifle market.”

Oddly enough, the political commentary was MIA from the earnings release the company put out yesterday. As the Q notes, sales of M&P rifles increased three-fold during the second quarter ended Oct. 31 to $8.6 million. M&P stands for military and police and as the filing also notes “204 police and security agencies to date have either selected the M&P 15 or approved the M&P 15 for on-duty use.”

Meanwhile, during a news conference a week ago, when asked by a reporter about the surge in gun sales, Obama sought to reassure gun owners that he wasn’t taking away their guns. “I believe in common sense gun safety law, and I believe in the second amendment. And so, lawful gun owners have nothing to fear.”

But here’s my question about this whole story on surging gun sales: if sales are so strong and the backlog is growing, how come that doesn’t seem to be reflected in the stock price? Something isn’t quite adding up here, despite some pretty hard-core spinning.