We recently published an article titled Why These Defense Stocks Are Gaining This Week. In this article, we are going to take a look at where Sturm, Ruger & Company, Inc. (NYSE:RGR) stands against the other defense stocks.
The world has been rocked by conflict over the last three years, with Ukraine and the Middle East being the most intense theatres of war. While the human impact of these conflicts has been tragic, the defense industry has profited by luring investors into piling up their stocks. Several of the world’s top contractors have seen their shares book all-time highs.
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Defense stocks have been volatile this month, with shares falling sharply on February 13 after Trump suggested the country could rapidly cut military spending in the future. He made these comments in the context of a potential future conference with China and Russia to discuss cutting defense expenditure to spend the money in other areas:
“When we straighten it all out, then one of the first meetings I want to have is with President Xi of China and President Putin of Russia, and I want to say let’s cut our military budget in half. And we can do that, and I think we’ll be able to do that.”
The US president has shared mixed statements on defense spending throughout his campaign and the early days of his second stint. Trump has appointed Elon Musk to lead the Department of Government Efficiency (DOGE), which will work outside the federal stream and aims to improve governance by reducing wasteful spending, cutting unnecessary regulations, and restructuring federal agencies.
However, stocks have picked up over the past week as European governments faced pressure to increase military spending following a meeting between American and Russian officials in Saudi Arabia over Ukraine. British Prime Minister Keir Starmer has said that it is crucial for Europe to spend more on defense. Here are some other comments from Mr. Starmer:
“We’re facing a generational challenge when it comes to national security. I think there’s a bigger piece here as well, which is that this isn’t just about the front line in Ukraine. It’s the front line of Europe and of the United Kingdom. It’s about our national security and I think that we need to do more.”
Defense stocks continue to rally this week after a conservative victory in Germany, signaling the shift to the right in Berlin. According to a Bloomberg report, Friedrich Merz, the country’s chancellor-in-waiting, has already opened talks between the Christian Democrats and Social Democrats over a $210 billion emergency defense fund.
Officials from the two parties are working to find ways to come around Germany’s strict restrictions on government borrowing. Merz has promised to ramp up military expenditure, but his plans were upset by fringe parties winning a blocking minority in the parliamentary elections.
Let’s now head over to the list of defense stocks that are gaining this week. Please note that the stocks listed are based on one week’s performance. Our analysis does not reflect the prospects of the company. Their share price could go high or low in the future, depending on the external market conditions, industry-specific challenges, and the company’s capabilities. Additional research and caution are advised before making investment decisions.
Methodology
For this article, we went through screeners to see how stocks in the aerospace and defense industry performed over the past week. From there, we picked the top 10 stocks with the highest percentage gains in share price during this period. All data is as of the close of business on Monday, February 24, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A row of raw materials in pristine condition, waiting to be crafted into firearms.
Sturm, Ruger & Company, Inc. (NYSE:RGR)
Weekly Gains: 11.82%
Sturm, Ruger & Company, Inc. (NYSE:RGR) is an American firearms company with a diverse portfolio of products, mainly serving three product lines – pistols, rifles, and revolvers.
The stock went up significantly over the last week after the company released financial results for the fourth quarter and full year 2024 on February 19. While profitability declined in 2024 compared to 2023 due to unfavorable deleveraging of fixed costs, Sturm, Ruger & Company, Inc. (NYSE:RGR)’s performance during the fourth quarter was encouraging.
Q4 2024 results were drastically better sequentially, with production increasing 10%, sales up 19%, and profit more than doubling compared to Q3. The results were also better year-over-year. Sturm, Ruger & Company, Inc. (NYSE:RGR) reported quarterly net sales of $145.8 million and diluted EPS of $0.62, improving from net sales of $130.6 million and diluted EPS of $0.58 in Q4 2023.
Investors have also been encouraged by Sturm, Ruger & Company, Inc. (NYSE:RGR)’s balance sheet position, as it enters fiscal 2025 debt-free, with reduced inventories, and a robust pipeline of new products.
Overall RGR ranks 2nd on our list of the defense stocks that are gaining this week. While we acknowledge the potential of RGR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than RGR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.