Firearms maker Sturm, Ruger & Co. (NYSE: RGR) announced this morning that it would stop taking new orders for its products until the end of May 2012. The company’s shares hit a new high on the news, but competitor Smith & Wesson Holding Co. (NASDAQ: SWHC) saw its shares shoot up even more on the news.
In its statement, Ruger said:
- The Company’s Retailer Programs that were offered from January 1, 2012 through February 29, 2012 were very successful and generated significant orders from retailers to independent wholesale distributors for Ruger firearms.
- Year-to-date, the independent wholesale distributors placed orders with the Company for more than one million Ruger firearms.
- Despite the Company’s continuing successful efforts to increase production rates, the incoming order rate exceeds our capacity to rapidly fulfill these orders. Consequently, the Company has temporarily suspended the acceptance of new orders.
Investors obviously think that Smith & Wesson can fill the gap. Shares are up about 12% at $7.70 after posting a new 52-week high of $7.82 earlier today. The stock’s 52-week range is $2.29-$7.82.
Ruger’s shares are up more than 8% at $45.92 after it, too, posted a new 52-week high of $46.78. The stock’s 52-week range is $18.65-$46.78.