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Amid the ongoing debate over the role of Wall Street in promoting gun safety, many financial companies are taking serious measures by reviewing and making changes in their business relationship with gun manufacturers and retailers.
Recently, BlackRock BLK, in a notice posted on its website, announced the launch of new funds and index-tracking products that exclude gun manufacturers and retailers. This means that retailers – Walmart WMT, Dick's Sporting Goods and Kroger – (that have limited their sale of firearms to customers aged 21 or more) will not be part of the newly launched products.
Also, the three largest U.S. publicly traded gun companies — Sturm Ruger RGR, American Outdoor Brands AOBC and Vista Outdoor VSTO — will not be part of these funds and products.
Further, this Zacks Rank #3 (Hold) company will be reducing expenses for funds tracking a socially responsible investing index (those already excludes these stocks) by 50% to 25 basis points.
(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)
Notably, following the deadly school shooting in Florida in February, several financial firms started reviewing their ties with the firearm industry and National Rifle Association. In fact, BlackRock was one of the first financial companies to go public with its intention to engage in discussion with gun makers and retailers regarding business policies and practices related to the production and sale of firearms last month.
Further, in late March, Citigroup C became the first major Wall Street bank to announce changes relating to how it will conduct business with gun retailers. The bank, in an email statement, said that new policy retailers must sell firearms only to customers above 21 years of age and they must have passed a background check. Also, these retailers should not sell “bump stocks” or high-capacity magazines.
Bank of America, State Street, Vanguard Group, T. Rowe Price Group, Inc. and Blackstone are among the companies that have spoken against the gun culture, but so far haven’t come out with similar plans. Also, U.S. public pension funds are under pressure to divest from gun manufacturers.
Another Wall Street giant, Well Fargo WFC, doesn’t wish to wade into gun control debate. Last month, in an interview to the Charlotte Observer, the company CEO, Tim Sloan said that he has doubts over whether banks should get more involved. Per a Bloomberg report, Well Fargo is the top financier for the gun industry.
Amid all these, the comptroller of New York state’s pension funds, in a letter to nine major financial companies, have asked whether gun purchase should be classified with other risky transactions like illicit drugs and cryptocurrencies. These firms include JPMorgan, Bank of America, Wells Fargo, First Data Corp., Worldpay Inc. and Mastercard. These companies have also been asked to evaluate and explore the cost of implementing systems that could reject purchases of firearms, ammunition or accessories.
The efforts by the financial companies are commendable. These initiatives will definitely play a tremendous role in restricting unsafe gun usage. But these measures are just the beginning, there is a significant scope to do more.
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Wells Fargo & Company (WFC) : Free Stock Analysis Report
Citigroup Inc. (C) : Free Stock Analysis Report
American Outdoor Brands Corporation (AOBC) : Free Stock Analysis Report
BlackRock, Inc. (BLK) : Free Stock Analysis Report
Sturm, Ruger & Company, Inc. (RGR) : Free Stock Analysis Report
Vista Outdoor Inc. (VSTO) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
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