by Ian Cooper
With new storms brewing, it’s time to jump into hurricane prep stocks – especially oversold ones, like Generac Holdings (GNRC).
At the moment, there’s a potential hurricane forming in the Gulf. According to Chron.com, “The National Hurricane Center announced Monday morning that the chances of “tropical cyclone formation” have tripled, up to 90 percent from 30 percent as of Friday.”
“Heavy rainfall from Potential Tropical Cyclone Nine is expected across South Texas on Tuesday and Wednesday,” they added, noting that “coastal flooding is possible along the south Texas coast tonight through Tuesday morning.”
Of course, if you’re in its way, be safe.
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 $116.18. We’d like to see it refill its bearish gap around $155.
There are also the 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 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.”
At less than $100, XYL is technically oversold at strong support. It’s also over-extended on RSI, MACD, and Williams’ %R. From a current price of $99.91, we’d like to see XYL refill its bearish gap around $104 initially.