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November was the latest in a string of breakout months for firearm and ammunition sales. NICS background checks surged by more than 40% YoY while ecommerce helped Black Friday and Cyber Monday kick off the holiday buying season. Shortages of ammunition are now prevalent across the US as manufacturers have scant inventory and are basically distributing bullet supplies right off of the assembly line. First-time gun buyers continue to fuel a record-breaking 2020 to new heights.

Related Stocks: Sturm, Ruger & Company, Inc. (RGR), Smith & Wesson Brands, Inc. (SWBI), Vista Outdoor Inc. (VSTO), Olin Corporation (OLN)

One of the best indicators of firearms demand, the FBI’s National Instant Criminal Background Check System (NICS), showed that more than 3.62 million background checks were performed last month, compared to 2.57 million in November 2019. That represents an increase of more than 40% YoY, and a 10% rise when compared to October.

As Forbes notes, FBI background checks in the first 11 months of 2020 totaled more than 35.75 million, easily exceeding 2019’s record of 28.36 million for the entire year.

The National Shooting Sports Foundation (NSSF), which releases adjusted data on firearms sales to remove NICS purpose code permit checks and permit rechecks used by several states from the data, estimated that 1.95 million background checks were performed before gun sales in November, a staggering 45.2% increase from the same period in 2019.

2020 has already been a record year for gun sales and firearms investors expect a strong holiday season to close out the final quarter. Indeed, when you observe the data since 1999, the first year with complete data from the FBI, the pattern is clear: background checks have peaked each year in November and December.

Though the FBI’s data showed a nearly 8% decline in background checks for Black Friday gun purchases, the 186,645 checks conducted still represents the fourth-largest one day total on record. Additionally, if you expand the sales data to all of Black Friday Weekend, reports that sales were up 4.2% from last year overall, significantly trending higher on Cyber Monday, which saw its NICS figures bounce 65.2%.

This coincides with a broader ecommerce boom that is sweeping the retail market. Last August, MRP noted that major online firearms site saw weapons sales spike 90%, led by handguns. Web traffic to had been up 60% – 70%.

A recent study in the Journal of Psychiatric Research indicated many existing gun owners are now stockpiling weapons out of uncertainty caused by COVID-19, but the real driver of this year’s particularly strong sales boom is first-time buyers. This past summer, dealers surveyed by the NSSF found that about 40% of their sales during the surge have come from first-time gun buyers. Typically, this group represents just one quarter of guns sold.

If you look deeper into demographics behind the shift,  TIME Magazine writes that there has been a 58% jump in firearm purchases — the highest overall sales increase — among Black men and women, a demographic that skews heavily Democratic, compared with the same period last year. Sales to women overall, another demographic that leans left at the national level, are up 40% through September when compared with the same period last year. The NSSF estimates that 2 million women bought their first firearm in 2020.

Citing the NSSF’s data, Smith & Wesson chief executive Mark Smith told analysts in an earnings call that nearly 8 million Americans have already decided to “exercise their Second Amendment rights for the first time” so far this year. As for the company itself, their firearms sales surged 119% in the quarter as long gun sales tripled and handgun sales doubled. Earnings per share rose more than 900% over the past year to $0.93, which obliterated consensus estimates…

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