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In this article, we discuss 10 best hurricane and natural disaster stocks to buy now. If you want to read about some more natural disaster stocks, go directly to 5 Best Hurricane and Natural Disaster Stocks to Buy Now.
Climate change in general and global warming in particular have started to create new problems for forecasters and economists alike. According to Paul Krugman, a top economist and an op-ed columnist for the New York Times, not only are hurricanes getting stronger, but they are also intensifying more rapidly than they used to, making it difficult to issue early warnings for communities in their path. This has left these communities more vulnerable to natural disasters and compounded the economic impact of these storms for local and state governments.
For example, Hurricane Ian, a large and destructive Category 4 Atlantic hurricane that struck the Florida coast recently, leaving hundreds dead, destroying countless homes, and risking under-pressure supply chains, is estimated to be among the top-10 costliest storms in the US, resulting in about $70 billion to $120 billion in economic damage, per news publication Bloomberg. The disaster has left coasts in the US at particularly high risk of more flooding, property damage, and unemployment.
In the wake of the natural disaster, the economic losses have also created certain opportunities for businesses whose products can help people recover some of what they lose in these storms. Some of the best hurricane and natural disaster stocks in this context include The Home Depot, Inc. (NYSE:HD), Copart, Inc. (NASDAQ:CPRT), and 3M Company (NYSE:MMM). Investors looking for more details about this opportunity should consider that natural disasters cost $280 billion globally last year, per insurer Munich Re, with damage in the US accounting for half that.
Gregory Daco, the chief economist with EY Parthenon, recently talked to news platform CNN to outline some of the industries that could be impacted by the storm. Daco noted that the hurricane had resulted in power outages, flight cancellations, disruptions to energy extraction and refinement, and disruptions to crops — all sectors that are an important part of normal economic activity. He further noted:
“We have to be careful about this so-called ‘broken window fallacy’ — this idea that if you break a window, because you have to repair it, you’re essentially generating output. That does not hold in the case of a natural disaster in any form. You do not double up on the energy production after a hurricane; you do not double your crops … you’re not going to work twice as hard next week because you had no power this week.”
Our Methodology
The companies that witness a surge in demand after hurricanes and natural disasters were selected for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
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Best Hurricane and Natural Disaster Stocks to Buy Now
10. Smith & Wesson Brands, Inc. (NASDAQ:SWBI)
Number of Hedge Fund Holders: 13
Smith & Wesson Brands, Inc. (NASDAQ:SWBI) designs, manufactures, and sells firearms worldwide. It is one of the top hurricane stocks to invest in. After crisis events like hurricanes and other natural disasters, gun sales go up as the public safety paradigm shifts due to a general relaxation in the rules of violent engagement. Smith & Wesson Brands, Inc. (NASDAQ:SWBI) reported a sales drop of 69% in FQ1 in what the company called a return to a normal demand pattern for the retail firearms business. Temporary headwinds from inventory corrections within the channel also factored into the weak quarterly results, per the firm. On September 12, a new Merchant Category Code was made by The International Organization for Standardization for gun stores to process payment card transactions, very similar for use in restaurants, bicycle shops, and hair salons, helping firms like Smith & Wesson Brands, Inc. (NASDAQ:SWBI) better document their sales.
On September 09, Lake Street analyst Mark Smith kept a Buy rating on the Smith & Wesson Brands, Inc. (NASDAQ:SWBI) stock and lowered the price target to $22 from $26, stating that the company could have stuffed the channel and reported better quarterly results, but the long-term outlook outweighed the desire to boost short-term results.
At the end of the second quarter of 2022, 13 hedge funds in the database of Insider Monkey held stakes worth $63.9 million in Smith & Wesson Brands, Inc. (NASDAQ:SWBI), compared to 12 in the preceding quarter worth $58 million.
Just like The Home Depot, Inc. (NYSE:HD), Copart, Inc. (NASDAQ:CPRT), and 3M Company (NYSE:MMM), Smith & Wesson Brands, Inc. (NASDAQ:SWBI) is one of the best hurricane stocks to buy according now.
9. Energizer Holdings, Inc. (NYSE:ENR)
Number of Hedge Fund Holders: 16
Energizer Holdings, Inc. (NYSE:ENR) manufactures, markets, and distributes household batteries, specialty batteries, and lighting products worldwide. It is one of the best hurricane stocks to invest in. After or ahead of natural disasters like hurricanes, there are increased sales of alternative power sources since electricity supplies are disrupted due to extreme weather. In March this year, Energizer Holdings, Inc. (NYSE:ENR) had announced the successful completion of a $300 million offering of 6.500% senior notes due 2027. The offering was used to repay indebtedness outstanding under the firm’s existing revolving credit facility and to repay fees and expenses.
On August 09, JPMorgan analyst Andrea Teixeira kept a Neutral rating on Energizer Holdings, Inc. (NYSE:ENR) stock and lowered the price target to $32 from $33, saying that the company’s second quarter earnings beat was primarily driven by better than expected reported gross margin and a lower tax rate that more than offset softer organic revenue.
Among the hedge funds being tracked by Insider Monkey, New York-based firm GAMCO Investors is a leading shareholder in Energizer Holdings, Inc. (NYSE:ENR), with 1.3 million shares worth more than $38 million.
8. Denny's Corporation (NASDAQ:DENN)
Number of Hedge Fund Holders: 18
Denny’s Corporation (NASDAQ:DENN) owns and operates full-service restaurant chains under the Denny's brand. It is one of the premier hurricane stocks to invest in. Natural disasters force people out of their homes and they have to rely on prepared food until they are back in their homes. Denny's Corporation (NASDAQ:DENN) recently completed its acquisition of Keke's Cafe, which should be margin accretive, and has provided an immediate sales boost as the brand has considerable whitespace. Denny's Corporation (NASDAQ:DENN) also released its Q2 results last month, reporting a quarterly revenue of $115 million, an 8% increase from the year-ago period. Late last year, Waitr had announced a national partnership with Denny’s. In this agreement, Denny’s would deliver through Waitr in more than 400 Denny’s locations.
On August 29, CL King analyst Andrew Wolf reinitiated coverage of Denny's Corporation (NASDAQ:DENN) stock with a Buy rating and a $14 price target, stressing that the company's Average Unit Volumes, or AUVs, were above the levels of FY19 and that same-store sales gains were coming from longer operating hours, added-value menu items, and restarting the remodeling program.
At the end of the second quarter of 2022, 18 hedge funds in the database of Insider Monkey held stakes worth $23 million in Denny’s Corporation (NASDAQ:DENN), compared to 16 in the previous quarter worth $49 billion.
7. AECOM (NYSE:ACM)
Number of Hedge Fund Holders: 25
AECOM (NYSE:ACM) provides professional infrastructure consulting services for governments, businesses, and organizations. It is one of the elite hurricane stocks to invest in. Hurricanes cause damages to public and private infrastructure and the firm can help with reconstruction efforts in this regard. AECOM (NYSE:ACM) growth is likely to be supported by current industry trends, and new business initiatives will help them gain market share. AECOM (NYSE:ACM)'s state and local clients are experiencing record revenue and budget surpluses, which will assist the company. The implementation of the Bipartisan Infrastructure Law will aid the firm as well. In July, Orange County Public Schools in Florida selected AECOM for program management services, remodeling, renovations, and additions to existing schools and facilities, as well as the construction of new schools and facilities in a 5-year contract.
On August 26, Baird analyst Andrew Wittmann kept an Outperform rating on the AECOM (NYSE:ACM) stock and raised the price target to $89 from $82, highlighting that 2022 outlook could continue to reflect earnings resilience for most engineering and construction companies.
At the end of the second quarter of 2022, 25 hedge funds in the database of Insider Monkey held stakes worth $630 million in AECOM (NYSE:ACM), compared to 32 in the preceding quarter worth $775 million.
6. Fluor Corporation (NYSE:FLR)
Number of Hedge Fund Holders: 26
Fluor Corporation (NYSE:FLR) provides construction and engineering services. It is one of the most prominent hurricane stocks to invest in. The firm recently announced that it had secured two reimbursable engineering, procurement, and construction management contracts by BASF for the ethylene oxide/ethylene glycol and infrastructure, offsite, and utilities packages as part of a new Verbund program in China. The contract value to Fluor is more than $2 billion and was booked in the third quarter of 2022.
On August 8, Citi analyst Andrew Kaplowitz maintained a Neutral rating on Fluor Corporation (NYSE:FLR) stock and lowered the price target to $26 from $27, noting the second quarter results of the firm were weaker than expectations.
At the end of the second quarter of 2022, 26 hedge funds in the database of Insider Monkey held stakes worth $321 million in Fluor Corporation (NYSE:FLR), compared to 32 in the preceding quarter worth $397 million.
In addition to The Home Depot, Inc. (NYSE:HD), Copart, Inc. (NASDAQ:CPRT), and 3M Company (NYSE:MMM), Fluor Corporation (NYSE:FLR) is one of the best hurricane stocks to buy according to hedge funds.
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Disclosure. None. 10 Best Hurricane and Natural Disaster Stocks to Buy Now is originally published on Insider Monkey.
