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3 hurricane investing ideas

By Greg Guenthner · Bankrate.com
Monday, November 5, 2012
Posted: 1 pm ET

New York and New Jersey residents continue to struggle through the side effects of Superstorm Sandy this week. Flooding, power outages and gas shortages continue to plague the hardest hit areas, which suffered damages estimated near $50 billion, according to the Associated Press.

Of course, much of this money will go to the companies that can help the region recover from the devastation. There are investing opportunities, too -- if you know where to look.

Eager stock traders have already bid up shares of some of the most obvious candidates. With power outages continuing to cripple parts of New York City and eastern New Jersey, shares of generator manufacturer Generac Holdings (NYSE:GNRC) have jumped nearly 30 percent since Sandy made landfall.

However, huge price swings in such a short time frame probably aren't sustainable. So if you're looking for the best post-hurricane investments, stick with businesses that stand to reap the long-term benefits from the cleanup efforts.

Garbage and debris hauling

The first stage of any natural disaster is the trash and debris process. That’s the perfect reason to turn to trash-hauling giant Waste Management (NYSE:WM).

While Waste Management has a nationwide presence, the firm offers both commercial and residential facilities throughout New York and New Jersey. The company should play a large role as the region begins to assess the storm damage.

Building and construction supplies

Once the debris is finally removed, it's time to rebuild. Contractors and homeowners will turn to big-box home improvement warehouses Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW). Considering the extent of the storm's damage, Lumber Liquidators Holdings (NYSE:LL) is another viable option.

Bonus: All three of these names are also benefiting from a stabilizing housing market.

Storage

While workers move in to repair countless shredded roofs and flooded basements, residents will need to find somewhere to stash their belongings.

Contractors will likely be spread thin throughout the region, and home repairs will take time to complete. Therefore, self-storage providers should see a bump in business that could last a year or two -- maybe even longer.

Extra Space Storage (NYSE:EXR) is one name that stands to benefit. The company has eight locations in the greater New York City area that could attract plenty of business over the next several months. From a valuation standpoint, the stock is also slightly cheaper relative to earnings than the massive real estate investment trust Public Storage (NYSE:PSA).

Disclaimer: The views expressed in this post are entirely those of guest blogger Greg Guenthner and do not reflect the views of Bankrate.com. As of Nov. 5, 2012, the author does not own stock in any of the companies mentioned in this post.

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1 Comment
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