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Two sectors likely to get boost from rebuilding efforts after Japanese Earthquake

|Includes:AMFW, BKR, CBI, FLR, JEC, KBR, LPX, PCL, RYN, TTEK, Weyerhaeuser Co. (WY)

Japanese earthquake and the tsunami have caused substantial damage impacting housing and infrastructure in ~ 1300 miles of shoreline. In addition to homes getting destroyed several oil refineries are shut and port closed. Following are the two sectors which may benefit from rebuilding efforts after Japanese Earthquake

Forest Products: Japanese housing market is one of the world’s largest wooden housing market. It is in cyclically depressed condition and rebuilding efforts after the earthquake can act as a catalyst. Timber and wood product rich names like WY, LPX, PCL, and RYN can benefit directly and indirectly from future shipments of logs, lumber, and structural panels to Asia.

Engineering & Construction Companies: Although not much direct work is expected to come from Japan given the presence of established local contractors, higher capacity utilization for relevant Asian competitors may help US E&C companies. Around 1/3 of Japanese refinery capacity is now shut. US E&C companies with oil & gas space exposure like FLR, FWLT, JEC. CBI, KBR may get some benefit going forward. Further, the concerns about tsunami impacts on US west coast may also lead to reallocation of stalled funding for coastal waterway protection and FEMA. Tetra Tech, Inc. (NASDAQ:TTEK) and Michael Baker Corporation (NYSEMKT:BKR) are most levered to benefit from it.

Stocks: WY, LPX, PCL, RYN, FLR, AMFW, JEC, CBI, KBR, TTEK, BKR