Seasonal Investing: Top Hurricane Stocks to Follow

Hurricane season doesn’t officially begin until June.

But Mother Nature may be throwing one our way a bit early this year.  In fact, according to the National Hurricane Center, as noted by CNBC, the Atlantic’s first tropical storm may develop near Florida and the Bahamas this weekend.  Plus, the 2020 hurricane season is expected to be very active, with at least 16 forecast tropical storms, eight of which could become hurricanes as also noted by CNBC.  That’s thanks in part to a developing La Nina.  

At the same time, we can actually profit from hurricanes, as some companies predictably see a jump in costs as they repair businesses. Other companies generate more business as they supply the products and services needed in the rebuilding effort.  

Here are some of the top ones to keep in mind.

Generac Holdings (GNCR)

GNRC is a $6.13 billion leader in power generation equipment and other light-motor equipment for residential and industrial customers. The company is the market leader in home standby generators and the leading global manufacturer of mobile generators for industrial use.  Beyond the physical damage to homes and businesses, one of the biggest inconveniences of a powerful storm is electrical outages. 

GNRC has a history of running higher around the beginning of the hurricane season. 

Home Improvement Stocks

Typically, investors bid up Home Depot (HD) and Lowe’s (LOW) since they historically stand to benefit from increased sales of plywood and other home improvement goods.  This segment is “naturally positively exposed to preparation and recovery efforts,” says Morgan Stanley.  These “typically see a boost in sales post-storm as damaged property is repaired.”

Xylem Inc. (XYL)XYL is another one to watch.  It’s a global leader in water services, including testing, treating and transportation. When a massive storm hits, floodwaters can overwhelm public drinking water and mean large government contracts for making the water safe again.