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World's Top Gun Maker Sees Shares Soar Following Obama's Executive Order

© AP Photo / Ed AndrieskiThis photo taken on Thursday, June 27, 2013, shows a rack of rifles at Firing-Line gun store in Aurora, Colo.
This photo taken on Thursday, June 27, 2013, shows a rack of rifles at Firing-Line gun store in Aurora, Colo. - Sputnik International
Shares in gun manufacturer Smith & Wesson soared to their highest level ever after President Barack Obama announced new restrictions on gun sales intended to reduce the country’s mass shootings.

Smith & Wesson shares surged by more than 11% on Tuesday to end the day at a new high of $25.86. Earlier that day, shares had reached $26.54, the highest value since February 1999. The rise followed a nearly 6% gain on Monday.

US President Barack Obama holds a press conference in Kuala Lumpur on November 22, 2015, following his participation in the Association of Southeast Asian Nations (ASEAN) Summit - Sputnik International
Obama Gun Control Fiat Contains Rules Already Present in US Law

The world's largest gun company told investors that it expected sales to spike after news broke last Thursday of President Obama's plan to announce executive actions to tighten US gun control laws.

The company, which makes a third of all revolvers owned in the United States, said sales had been so strong that some distributors were beginning to run out of some of its most popular guns.

"The sell-through rate of its products at distribution has been stronger than originally anticipated, resulting in reduced distributor inventories of its firearms," the company said in a statement on Monday night.

Smith & Wesson said sales for the quarter ending January 31 are expected to be at $175-180 million. That is up from its previous estimate of $150-155 million. Annual revenues are expected to total $650-660 million, up from last year's $627 million.

Shares in Sturm, Ruger & Company, the nation's other major listed gun company, rose by 7.4% to $66.

Brian Ruttenbur, an analyst at BB&T Capital Markets, upgraded Smith & Wesson from "hold" to "buy."

"Many demand drivers (presidential elections, potential regulations, and new product introductions) should allow for very strong top- and bottom-line growth for [Ruger]," he said in a research note.

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