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Renaissance Technologies Cuts Sturm Ruger Stake by 44%

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Renaissance Technologies Cuts Sturm Ruger Stake by 44%

Renaissance Technologies Corp. has just reduced its stake in gun maker Sturm, Ruger & Company (NYSE:RGR) according to a 13G filed with the SEC. The famous quant hedge fund now owns 480,900 shares or 2.51% of Sturm, Ruger & Company (NYSE:RGR). A 13F filed at the end of the third quarter showed the hedge fund with a 4.44% stake (the sale is a decrease of approximately 43%). Some firms have been under pressure to sell shares in gun makers after the Sandy Hook shooting tragedy. However, the sale by Renaissance Technologies could be unrelated to the tragedy; the hedge fund owns over 1,000 stocks.

In the wake of the recent Newtown tragedy, the Obama administration is currently conducting discussions (led by Vice President Biden) on gun violence. Recent reports indicate it is becoming more likely that the federal government will soon reinstate tightened gun control legislation that could ban both tactical rifles and high capacity magazines, similar to laws that were in place from 1994-2004. The administration may even utilize an executive action to do so, thus bypassing the major hurdle of a Republican-led House of Representatives.

Despite all the focus on potential political sales growth during President Obama’s first term, industry-wide double-digit sales growth began in 2006, with double-digit handgun growth beginning in 2005. Furthermore, the strong sales could be due to the following: (1) strong new product innovation in the industry for the first time since the 1980s, (2) increasingly liberalized concealed-carry laws throughout most of the United States, and (3) increased social acceptance of firearm use for both personal defense and recreation/leisure. Additionally   from 2001-2007 handgun sales grew at an 11% CAGR, prior to the 2009/2011 political surges.

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