The Top Hurricane Stocks to Own Now

Sep 22, 2022

Hurricane season is well under way.

In fact, after hitting Puerto Rico, the Dominican Republic, and the Turks and Caicos, Hurricane Fiona is now headed for Bermuda.  From there, it’s expected to turn towards Canada. As of this morning, the storm was traveling at NNE at 15mph, with winds of 130 mph.

That’s just one storm.

There’s another just starting to develop and could become a monster threat to the U.S. Gulf Coast by next week, named Hermine.  

“After a slow start, the Atlantic hurricane season has ratcheted up quickly,” Phil Klotzbach, research scientist at Colorado State said, as noted by CNN.  “People tend to lower their guard and think, oh, yeah, we’re out of the woods,” Torres said. “But in reality, the season continues. We are still in September; we still have October to go. Anything that forms over either the Atlantic or the Caribbean is something that we need to keep monitoring very closely.”

That being said, we can use hurricane season as an opportunity to buy storm-related stocks.

Generac Holdings (GNCR)

GNRC is an $11.2 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.  In 2021, GNRC ran from about $321 to $410.  This year, we’re hoping it can do something similar from severely oversold conditions.

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)  

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.  XYL also has a history of running during hurricane seasons.  In 2019, for example, it ran from about $76 to $79.  In 2020, it ran from about $69 to $80.  In 2021, it ran from about $117 to $134.

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