If you think I’m kidding about losing your rear end in the gun business, I can tell you that if I had been holding one million shares of S&W stock three weeks ago I would have been worth roughly $30 million bucks and the same pile of shares today would fetch about $8 million less.  Meanwhile, the financial media is abuzz with the idea that the great run-up of gun sales thanks to you-know-who in the White House has finally come to an end. On the other hand, according to FBI-NICS, the number of background checks is at an all-time high. So what’s really going on?

First of all, we need to remember that most of the guns manufactured in the United States come from companies that are still in private hands.  The only publicly-owned companies that provide detailed numbers are Smith & Wesson and Ruger, which together account for roughly 20% of all guns made each year in the US, but because of imports to the US market, their overall share of the gun business is somewhat less.

As for FBI-NICS background checks, these numbers are also not quite what they seem.  The gun industry would like you to believe that NICS checks are continuing to zoom upward, but the report issued by the FBI each month counts every time the telephone rings at the NICS call center in West Virginia, whether it’s for a gun transfer or not.  And in fact, roughly half the background checks each month are for reasons that have nothing to do with gun transfers at all, namely, to check the validity of gun licenses, pawn redemptions, etc.

The reason why several stock analysts downgraded S&W stock was because handgun transfers dropped 13% from February to March, with the decline in long gun transfers also noticeable but not quite as severe. And while the sell-through numbers posted in Ruger’s latest 10K report indicates that products aren’t piling up on anyone’s shelves, the bottom line is that gun sales simply haven’t been all that strong since the post-Sandy Hook gun-control furor died down.

Before I get into the NICS numbers in more detail, first, NICS doesn’t distinguish between new and used guns, which means, to begin with, that using NICS to judge the health of gun-making companies isn’t such a bright idea. Second, since NICS covers transfers, not the number of guns transferred, the monthly numbers for handguns and long guns are certainly undercounted, but nobody knows by how much.  On the other hand, NICS data is a good measure of gun transfer trends, which obviously reflects the health of the industry as a whole.

With that in mind, let’s look at monthly NICS transfers for March and start back in 2005.  Total gun transfers that March were 580,000, which climbed to 675,000 in March, 2008.  The number went to 900,000 in Obama’s first March (2009) and remained right around that figure each March through 2012.  Then we had Sandy Hook and a noisy argument about expanding background checks – the 2013 number was 1.4 million, but in 2014 it slipped down 17% to 1.1 million and remained at that same level the following year.

Here’s the bottom line.  Despite all the hue and cry from Gun Nation about how ‘everyone’ is getting into guns, the NICS numbers have been basically unchanged since the Democrats stopped trying to regulate guns.  And nobody is going to tell me that the 40% increase in NICS directly after Sandy Hook reflected a sudden upswell of interest by new buyers who wanted to purchase guns. So the gun market will continue to drift downward until the Clintons reclaim their love nest at 1600 Pennsylvania Avenue.  Unless the unthinkable happens in November and we elect someone who just ‘loves’ the 2nd Amendment.  In which case you can start off with however much money you want and you’ll still wind up with bupkis when all is said and done.