Is Facebook Inc (FB) Helping This Industry? You’ll Be Surprised

Performance

The Columbine High School shooting, on April 20, 1999 sparked a gun debate that still rages today. I can remember that day like it was yesterday, and wish that people would have focused more on the victims than debates. However, gun regulations have been implemented since that time, yet both gun companies have performed very well. The chart below shows exactly how well they (particularly Ruger) have performed since April 1, 1999.

RGR data by YCharts

We all know about the challenges Facebook Inc (NASDAQ:FB)’s share price has faced with its horrific IPO, the rebound from August until February, and its slight decline since then, but these gun companies don’t get quite as much press coverage. 2012 was Ruger’s weakest performance since the 2008 crash, and it still increased by over 53%. In fact, the stock has risen 303% since 2008. Smith & Wesson Holding Corporation (NASDAQ:SWHC) has increased 182% since 2008 despite a more than 8% drop in 2010.

The last thing I will look at with these companies for now is their earnings yield. Again, Facebook doesn’t bode well in this area. It only shows an earnings yield of 0.04% while, in a different industry, Sturm, Ruger & Company (NYSE:RGR) and Smith and Wesson show 7.5% and 11.1%.

The Foolish bottom line

Facebook Inc (NASDAQ:FB) is certainly not keeping up with the investment opportunities that Ruger and Smith and Wesson offer. Sturm, Ruger & Company (NYSE:RGR) and Smith & Wesson Holding Corporation (NASDAQ:SWHC) appear to offer reasonably cheap stocks, increasing revenues, and good long-term performance. With all the talk of gun regulations, the best news may be how well these two companies perform despite increased scrutiny and limits.

The article Are Gun Companies Benefitting From Facebook? originally appeared on Fool.com.

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