Hurricanes have devastating effects in areas where they hit. A major hurricane can affect many different market sectors for products and other items such as housing, gas prices, jobs and car prices among other important sectors.
Another area that hurricanes affect is stocks prices for various companies. This article aims at looking at the ways through which the hurricane affects the pricing of stocks for companies that directly benefit from hurricanes such as national retailers like the Home Depot and Storm Guard Impact Windows. A number of factors control the stock market. People tend to buy shares when they expect a company’s sales to rise. Home Depot is not an exception. Being a company that deals with merchandizing, logistics, as well as supply chain, investors tend to buy shares so that they can also gain from the company’s profits. They make a lot of money from the repairs that are needed before and after the hurricanes have occurred. This can be attributed to their swift disaster management team as well as their strategic planning.
During the month of October, the stock price of the Home Depot commonly rises. During the month of February, shares are typically lower and prices rise through the month of October. This implies that investing in companies like this can always be a good idea especially when you are expecting a hurricane. Even those who bought the shares earlier also end up gaining.
With a hurricane, there is a guaranteed increase in product sales.
A Hurricane is known to impact negatively on the economy of a place that it hits. Despite the negative connotations that are associated with them, there are some areas that witness substantive growth. A good example is the Home Depot stock. The demand for its stocks increases thus leading to an increase in its prices in the stock market.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.