As I write this article, thunder rolls through the window behind me. The sound is ominous
The sky, once bright blue, remains so in half the sky. The other half looks like someone painted it with a dirty brush.
I know what this means: The afternoon shower will be rolling through in a moment.
I live in Florida. In addition to being the season of COVID-19, its also hurricane season.
Each year, like clockwork, this season offers moneymaking opportunities for investors with good memories
And those reading this article.
In the year following the last major storm, three stocks were up an average of 14%.
I expect theyll earn double-digit returns after the next hurricane as well.
Natural Disasters Bring a Lot of Business
The official hurricane season for the Atlantic Basin is from June through November. The peak is from mid-August to late October.
And the National Oceanic and Atmospheric Administration predicts a 60% chance of an above-normal season.
Message received. We need to be extra careful this year with all that is happening.
We should also consider our investments.
A few stocks tend to see their sales pick up during this stretch:
(Source: Bloomberg, $ as of the June 30, 2020 close)
Natural disasters bring these firms a lot of business.
In advance of the storms, people go to home improvement stores to buy plywood to board up their house.
They pick up other goods as well. Things such as flashlights and batteries, as well as tarps and buckets.
After the storm passes, its time to clean up and rebuild.
So, people head back to the home improvement stores for cleaning supplies, vacuums and fans. And things such as chainsaws and rakes for the yard.
For those who have to rebuild, that can involve items from appliances to windows to paint. And on-site personnel at the stores can provide insight, too.
Some folks dont want or arent able to do the cleanup work. So, they call ServiceMaster.
Its disaster recovery group will help you assess and address any damage you may have.
Prepare for Hurricane Season
A recent storm that affected us was Hurricane Michael in October 2018. It was the first Category 5 hurricane to strike the lower 48 states since Andrew in 1992. It caused more than $25 billion of damage.
Home Depot, Lowes and ServiceMaster are three solid names to own if we get a major storm in 2020.
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