The U.S. has experienced higher temperatures during December so far. This is in sharp contrast to last month’s chill, marked by heavy snowfall in the Northeast and Midwest. However, temperatures may soon drop again following storm warnings for the Northeast.
Bitter November
Through November's end, the U.S. had experienced an early and bitter winter. Portland, OR experienced one of its earliest snowfalls. This included up to six feet of snow in upstate New York and the most frigid temperatures in Minnesota and Denver since the late nineteenth century.
Travel during the Thanksgiving period was affected by these severe conditions. More than 3,000 flights were delayed and 190 were cancelled. Winter’s onset was so early that ice on the Mississippi river ended the shipping season prematurely.
As millions of travelers hit the road, they found several routes were closed due to weather conditions. Travelers encountered dangerous road conditions in Northern and Eastern states, specifically New York and Michigan.
By Sunday, fair weather prevailed and the travel industry breathed a sigh of relief. Heavily crowded airports increased security waiting times. Chicago’s Midway airport witnessed a 1.2 mile security queue.
Perfect Storm Brewing?
Despite the respite provided since Sunday, atmospheric conditions are increasing the prospect of heavy rain and wet snow in several parts of the Northeast. Weather.com expects a buildup of low pressure near or offshore the Mid-Atlantic Coast.
This increases the prospect of heavy snowfall in the interior Northeast. This includes an area stretching from Mohawk in New York and the Upper Hudson Valleys, Catskills, Green and White mountains, Adirondacks and Northern Maine. At least six inches of snow are expected in such areas. Roads affected by snow in interior Northeast will impact travelers and result in flight delays during Tuesday and Wednesday.
Prospects of a Winter Chill
If we focus on Boston alone, the WBZ-TV AccuWeather Team says that there are strong indications of a severe winter overall. It believes that most global factors during fall are signals that heavy snowfall will occur. The threat of large storms continues to linger in the Mid-Atlantic region, especially during January and February.
Current projections for snowfall range from 10 to 20 inches above the average for most of the region. This implies 55 to 65 inches of snow in Boston. This would result in three consecutive years with above average snowfall, last witnessed in 1978.
Our Choices
Below we present three stocks which will gain from these trends, each of which also has a good Zacks Rank.
Briggs & Stratton Corporation (BGG) produces air cooled gasoline engines utilized for outdoor power equipment. Briggs & Stratton also markets and services these engines to original equipment manufacturers across the world. The company also provides parts and accessories for these engines. The company is a manufacturer of snow blowers which has a range of features. This includes its own Snow Series engine, dual trigger steering and push button chute rotation.
Briggs & Stratton holds a Zacks Rank #1 (Strong Buy) and has expected earnings growth of 45.1%. The forward price-to-earnings ratio (P/E) for the current financial year (F1) is 17.40.
Columbia Sportswear Company (COLM) designs, sources, markets and distributes outdoor clothing, accessories, footwear and equipment. This includes a range of winter coats. Columbia Sportswear offers its products primarily under four brands. These are Mountain Hardwear, Sorel, Montrail and Columbia. The company offers a range of products for winter outdoor activity enthusiasts, mountain climbers and elite skiers.
Apart from a Zacks Rank #1 (Strong Buy), the company has current year expected earnings growth of 24.3%. It has a P/E (F1) of 24.92x.
Douglas Dynamics, Inc. (PLOW) is a designer, manufacturer and seller of ice control equipment used by light trucks. This includes salt spreaders, snowplows and part and accessories for the same. Douglas Dynamics provides the largest and most exhaustive range of such products for light trucks in the U.S. and Canada. The company utilizes a distributor network to sell these products to professional snowplowers which undertake contracts to remove snow.
Douglas Dynamics holds a Zacks Rank #1 (Strong Buy) and has a significantly high current year earnings growth estimate. It has a P/E (F1) of 14.75x.
Even though a thaw has helped ease the weather for now, the threat of a harsher winter lingers. A perfect storm is all that is needed to affect a drop in temperature. Given these factors, adding these stocks to your portfolio would be a prudent choice.
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