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Chart of the Day / How to Trade the Wrath of Hurricane Florence

How to Trade the Wrath of Hurricane Florence

September 11, 2018

The 2017 Atlantic hurricane season was one of the worst on record.

All as Harvey, Irma and Maria made mincemeat out of the U.S.

Harvey flooded Houston. Irma battered the Caribbean before coming ashore in the Florida Keys. Maria destroyed homes and much of the infrastructure in Puerto Rico.

In all, it caused $250 billion in damage.

And now comes Florence – a 130 mph beast with a well-defined eye wall with sights set on the east coast. Described as an “atmospheric brick wall,” the storm surge, high winds, and incredible rainfall chances will lead to sizable power outages.

If you’re in the path, it’s just a good idea to get out of the way. Please be safe.  Life is much more important to protect.

Of the many stocks racing higher on the storm, including Home Depot and Lowe’s, Generac Holdings (GNRC) is racing higher.

GNRC is a $3.65 billion leader in power generation equipment and other light-motor equipment for residential and industrial customers. The company is the market leader in home standby generators and the leading global manufacturer of mobile generators for industrial use.

Beyond the physical damage to homes and businesses, one of the biggest inconveniences of a powerful storm is electrical outages.

It’s why in 2017, GNRC exploded from $37 to $53 before pulling back post-season.

As Florence intensifies, we’re recommending a buy on the GNRC stock at market prices.  We can also buy to open the GNRC November 16, 2018 60 calls at market, as well.

We’re only looking to stay in this trade for a short period of time.

Once the hurricane is priced in, we could see a near-term reversal.