With Hurricane Florence, possibly the largest-ever storm to hit as far north as the Carolinas, barreling toward the East Coast, close to a million people have begun evacuating their homes. Hurricane Florence is expected to make landfall early Thursday as a Category 4 storm with winds up to 150 miles an hour.
Companies including Boeing, Daimler, Cargill, and Pfizer have already closed manufacturing and processing plants in the Carolinas in anticipation of the weather and due to port closures up and down the Eastern Seaboard.
Here’s how investors can try to stay safe.
Winners: Construction and Repair Companies
If Florence causes major damage, the rebuilding effort will be a boon to the firms providing the supplies and materials required. Home-improvement retail chains Home Depot(HD) and Lowe’s(LOW) typically see their sales rise both in preparation for a storm, as residents stock up on plywood, generators, and other supplies, and after, as home-building materials are needed. Home Depot and Lowe’s stock this week climbed 3.7% and 4.2%, respectively.
Portable generator producers Generac Holdings(GNRC), up 6.7% this week, and Briggs & Stratton (BGG), up 0.9%, stand to benefit from demand for backup power in the event of major outages. Florence’s strong winds could cause extensive damage to roofs and windows, boosting window and door producers JELD-WEN Holding(JELD) (+4.8%) and PGI Innovations(PGTI) (+2.8%), roofing manufacturer Owens Corning (OC) (+3.3%), and suppliers Beacon Roofing Supply(BECN) (+7.9%) and BMC Stock Holdings (BMCH) (+2.1%). United Rentals (URI), up 10.6% this week, could also see increased demand for construction and power equipment rentals after the storm.
Losers: Insurance Companies
Allstate (ALL), Progressive(PGR), and Travelers(TRV) are some of the insurers most exposed to Florence’s path, with significant commercial, homeowners, and automotive damage coverage in North and South Carolina, according to a report compiled by analysts at Sandler O’Neill + Partners. Privately held State Farm has the leading market share in both states.
Wells Fargo Securities predicts that property damage due to the storm could reach more than $20 billion, with insurers on the hook. Allstate shares fell 1.9% this week, while Travelers lost 1.7% and Progressive 1.3%.
Losers: Utility Companies
Heavy flooding and strong winds have energy generating and transmitting companies bracing for costly outages and damage. Scana(SCG), which serves hundreds of thousands of electric and natural gas customers in the Carolinas, lost 2.8% this week. Duke Energy(DUK) has a smaller presence in Florence’s path and was off 1.3%. Dominion Energy(D) — currently in the process of acquiring Scana — gained 0.2%.
Winners: Hog Futures
North Carolina has the largest pork production industry of any U.S. state besides Iowa, worth some $2.1 billion annually, according to the USDA. Disruption from Hurricane Florence could decrease supply, and appropriately October Hog Lean Futures have climbed 8.3% since Labor Day.
Winners & Losers: Travel companies
Several vacation cruise lines have been forced to reroute ships to avoid Hurricane Florence, including Royal Caribbean Cruises (RCL), Carnival(CCL), and Norwegian Cruise Line Holdings(NCLH). Royal Caribbean was the biggest loser this week, off 1.5% through Tuesday’s close, while Norwegian lost 0.4%, and Carnival fell 0.3%.
Winners this week include rental car companies Hertz Global Holdings (HTZ) and Avis Budget Group (CAR), up 5.4% and 2.5%, respectively. Evacuations increase the need for car rentals before major storms, while car damage drives demand after.
Write to Nicholas Jasinski at email@example.com