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Buy Smith & Wesson on surging background checks: Cowen

Gun enthusiasts look over Smith & Wesson pistols at the NRA Annual Meetings and Exhibits on May 21, 2016, in Louisville, Kentucky.
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Investors should buy Smith & Wesson on better-than-expected gun demand, according to Cowen, which reiterated its outperform rating on the gun manufacturer.

Cowen's Cai von Rumohr cited a 31 percent year-over-year surge in background checks during the month of June versus a 3 percent rise in the previous month.

June's criminal background check "surge likely reflects reaction to the Orlando shooting as gun owners buy (1) MSRs in anticipation of possible purchase restrictions, and (2) handguns for personal safety, " Rumohr wrote in a note to clients Tuesday.