Five Stocks for Hurricane Sandy
Hurricane Sandy is battering the East Coast and residents in New York City, New Jersey and Washington D.C. are hunkered down for at least several days of torrential rain, strong winds and surging storms. The NYSE's Duncan Neiderauer has closed down floor trading in Manhattan for Monday; a decision for Tuesday's trading is expected by 4:00 pm EST.
Electronic trading on the NASDAQ was not open either. Although markets have been anticipating the impact of Hurricane Sandy for the last week, the unpredictable nature of hurricanes in the Atlantic should create investment opportunities for astute traders. Initial damage estimates for Hurricane Sandy have already soared into the billions of dollars.
Here's a look at some possible stock plays:
SUPERVALU (NYSE: SVU) – Residents not forced to evacuate their homes have stocked up on essentials like food and water. Nearly 20 percent of SUPERVALU's sales last year came from the Northeast segment, the region which is now being threatened by Hurricane Sandy. With shares of SUPERVALU up more than 40 percent since Friday following a rumored bid from Cerberus, traders might want to also consider Kroger (NYSE: KR) or Costco (NASDAQ: COST) as “Hurricane Sandy grocery plays.”
Priceline.com (NASDAQ: PCLN) – U.S. airlines have cancelled almost 10,000 flights over the last few days in preparation for Hurricane Sandy. Online travel sites like Priceline, Orbitz (NYSE: OWW) and Expedia (NASDAQ: EXPE) will be jammed with travelers looking to reschedule flights.
Hertz (NYSE: HTZ) – For those travelers who can't be delayed by Mother Nature, renting a car may be the only answer. The cancellation of subways and trains throughout NYC and New Jersey should also benefit car rental companies like Hertz, Avis (NYSE: CAR) and Dollar Thrifty (NYSE: DTG). Hertz shares last week pushed below $13.50 for the first time since the end of August.
Boyd Gaming (NYSE: BYD) – New Jersey's Chris Christie had declared a state of emergency by Saturday morning and also initiated evacuations for Atlantic City's casino district. Short selling Boyd shares could be a solid way to play this move; the company receives more than 30 percent of sales from Atlantic City.
Home Depot (NYSE: HD) – Home Depot and/or Lowe's (NYSE: LOW) might be considered the “go to” hurricane plays as investors will be expecting East Coast residents to be buying items like generators. This assumption, however, has not consistently held in the past. During 2011's Hurricane Irene, Home Depot shares ran up as the storm approached, but sold off over the following two weeks. As a contrarian play, short Home Depot shares.
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