6 stocks for the drought of 2014
Companies that provide services related to water resources and firefighting will be in the spotlight as the disaster imperils the West.
By Karen Riccio
There's one thing even drier than the soil, reservoirs and mountains in the 12 states declared natural disasters by the U.S. government last week: the budget needed to deal with all the repercussions of severe droughts, including the imminent wildfires.
This drought is making history, so there's no telling what the final price tag might be.
A lack of water makes it nearly impossible to grow crops without the help of costly irrigation systems. So, farmers suffer.
Sparse snow packs keep reservoir levels far below normal, forcing state officials to speed up lengthy projects to update water infrastructure and creative pumping solutions. So, cities suffer.
Through August 2013, 33,000 wildfires spanning 5,300 square miles destroyed 960 homes and 30 commercial buildings at a cost of nearly $1 billion. Now that round two is underway, federal, state and local governments desperately need firefighting equipment and manpower. So, homeowners and fire crews suffer too.
It's particularly hard when natural disasters strike, whether they come fast and furious like Hurricane Sandy or the Northridge Earthquake, or slow and subtle like droughts. There are no winners. However, when companies supply services or products to help counter the devastating effects of disaster, the investment community calls that opportunity.
Companies involved in the business of farming, water efficiency and firefighting are sure to be affected. Here are five stocks to watch.
Here are a couple of that provide irrigation equipment to the heartland, specifically as it relates to efficiency. Every drop counts during a drought and Lindsay (LNN) and Valmont Industries (VMI) both manufacture irrigation equipment for more than two-thirds of the U.S. harvest as well as in key regions in Australia, Africa and Canada.
Although a combination of increased rainfall in some regions and higher crop production didn’t bode well for either company in 2013, each added about $45 to their stock prices in 2012 when the drought took hold.
As states, especially California, try to solve the long-term water shortage problem, water utility companies and equipment providers should be getting quite a few calls from Gov. Brown and Co. Here are a few in the small-cap arena: American States Water Company (AWR) is a public utility company that purchases, produces, distributes and sells water in California. The $526 million serves approximately 250,000 water customers. Franklin Electric (FELE) designs, manufactures and distributes groundwater and fuel pumping systems, electronic controls and related parts and equipment. Consolidated Water Company (CWCO) uses reverse osmosis technology to produce fresh water from seawater.
The federal government just announced that it will allot $3.9 billion to California to fight wildfires in 2014. Some of that may very well go to: Erickson Air-Crane (EAC), the builder of Aircrane helicopters with 2,650-gallon fire suppression systems and detachable water tanks. It just entered into a multi-year, $60 million contract with National Aerial Fighfighting Centre in Australia, another continent under fire. It is also the largest provider of heavy heli-tanker aircraft to the U.S. Forest Service. In Sept. 2013, Air-Crane signed a $5.6 million contract to manufacture fabricated aircraft assemblies for a unit of United Technologies (UTX). Prior to that EAC entered into a five-year agreement with Los Angeles County, valued annually at $2.7 million.
More from Traders Reserve
- Airline stocks that will soar in 2014
- 3 takeover targets you can bank on
- Stocks that will pay off in the coming credit-card revolution
The Writing's On The Wall: "Street"
This Ride's Over:
It's not the end of the world it's the end of the "Bull Market" for now
Every small-time investor should be running to their computer or calling their broker and cashing in their stocks. Those in the "Know" are already selling their shares .. The First Out Wins the Most..
We called this one for September of 2013, but the "Companies of Wall Street" kept buying back their own stock and the Government kept printing large tracks of monies and the Bonds were bought by the thousands.
I ask you to take a good look at your "Stock Sheets". Are those stocks worth what your listings say they are?
Is Costco worth $146.00 or is it worth $65.00, what about J.P. Morgan "Chase" when all the fines are paid out and the CEOs have cashed in their shares "as fast as they can" where will the market list them at..
It was a great ride and those who get out now will be telling their grandkids about the money they made on the "Stock Market Run they lived through and made Bank"..
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
These tech headliners are in the midst of broader breakdowns. Consider cutting them from your portfolio.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.