Hurricane season is underway.
With NOAA predicting another above-normal season, it’s time to invest in top hurricane stocks.
“For 2021, a likely range of 13 to 20 named storms (winds of 39 mph or higher), of which 6 to 10 could become hurricanes (winds of 74 mph or higher), including 3 to 5 major hurricanes (category 3, 4 or 5; with winds of 111 mph or higher) is expected. NOAA provides these ranges with a 70% confidence,” says NOAA.
Some of the top stocks to keep an eye on include:
Generac Holdings (GNCR)
GNRC is a $20.6 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. For the 2019 hurricane season, for example, it ran from about $54 to $100. For 2020, it ran from about $125 to $363. Now, as it consolidates around $326, it could move higher again.
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) 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.