Every year, hurricane stocks push higher.
This year has been no exception.
As we noted on June 8, 2021, it was time to back up the truck on stocks like Generac Holdings (GNRC) – a 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.
In fact, as Hurricane Ida began to swirl, and eventually nail Louisiana, shares of GNRC ran from a low of about $385 to about $450 in days.
Historically, we see similar moves. For the 2019 hurricane season, for example, it ran from about $54 to $100. For 2020, it ran from about $125 to $363.
Xylem (XYL) is another that historically runs in hurricane season.
According to the company’s site, “The official hurricane season in the United States takes place from May through November, with the peak season from mid-August to late October. Xylem can help make sure you are prepared. Well in advance of catastrophic weather events, Xylem 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.”
It’s part of the reason shares of XYL ran from $130 to $137 in recent days.
Even Lowe’s (LOW) and Home Depot (HD) saw their stocks push higher.
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.”