A Potential Category 4 Storm Could Fuel these Top Stocks

Sep 6, 2023

Hurricane season isn’t done with us just yet. Just days after Hurricane Idalia made a mess, Tropical Storm Lee is making its way to the eastern Caribbean, and is expected to become a Category 4 hurricane, with winds of about 140 mph this weekend.

At the moment, “Lee, with 45 mph winds, is more than 1,300 miles east of the Caribbean islands, the National Hurricane Center said. The hurricane could bring impacts to the Leeward islands by the weekend, but it’s too early to determine how close the storm could approach the islands, hurricane specialist Eric Blake wrote,” as noted by USA Today.

If the storm impacts the U.S., investors may want to accumulate hurricane stocks, such as:

Generac Holdings (GNRC)

For those looking for an investment idea with the storm, look to generator stocks. For example, oversold shares of Generac Holdings (GNRC). Not only is the stock starting to pivot higher, it could also benefit from surging demand for generators in preparation for potential power outages. GNRC last traded at $117.81. We’d like to see it refill its bearish gap around $155.

There are also home improvement stocks.

Home Depot (HD) and Lowe’s (LOW) 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 (XYL)

Xylem has a history of running higher in hurricane seasons, too. All as it works with “cities, counties and companies to create contingency plans that map out emergency response strategies and identify the required pumping equipment to react to natural disasters.”

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