Zacks Investment Ideas feature highlights: Arctic Cat, Home Depot, Columbia
Sportswear and First Trust ISE-Revere Natural Gas ETF
CHICAGO, Jan. 9, 2014
CHICAGO, Jan. 9, 2014 /PRNewswire/ --Today, Zacks Investment Ideas feature
highlights Features: Arctic Cat (Nasdaq:ACAT-Free Report), Home Depot
(NYSE:HD-Free Report), Columbia Sportswear (Nasdaq:COLM-Free Report) and First
Trust ISE-Revere Natural Gas ETF (AMEX:FCG-Free Report).
The Polar Vortex Could Push These Stocks Higher
Thanks to a 'Polar Vortex' of cold air coming down from the North Pole,
temperatures have been near records across much of the Midwest and Northeast.
Here in Chicago, temperatures with the wind chill approached 50 below zero to
start the week, while other cities in the region saw similarly brutal weather.
It also comes following a burst of heavy snowfall which snarled much of both
the Midwest and the Northeast, kicking of a particularly unfavorable start to
While the weather has hampered many in the transportation industry, and could
definitely hit some segments of the food world, not all stocks look to be
negatively impacted by the extreme weather. Below, we highlight three
companies which have buy ranks and may actually be benefit from increased
demand thanks to the wild weather:
Arctic Cat (Nasdaq:ACAT-Free Report)
ACAT had a great 2013 selling a variety of snowmobiles and ATVs to the general
public, as its stock appreciated by more than 60% on the year. This
Minnesota-based company could also see some solid trading in 2014 too,
especially if demand remains robust for its key cold-weather focused products
in this snowy weather.
Earnings estimates were already moving higher for ACAT before the storm,
suggesting that trends were still moving in the right direction. In fact, all
the estimate revisions for the current quarter and the current year have been
higher, while EPS growth (yoy) is expected to come in at 72% for next quarter.
ACAT currently has a Zacks Rank #2 (Buy), and its industry is actually ranked
in the top 5% too. So even if ACAT doesn't see a storm boost, this may be a
stock to keep your eye on this winter.
Home Depot (NYSE:HD-Free Report)
Home Depot is a massive home improvement retailer, and though it has a huge
base of operations, the company could see a modest uptick from the weather.
That is because demand for a variety of products that HD sells could spike—be
it anything from insulation and space heaters to shovels and snow
blowers—suggesting more good days could be ahead for this Dow component.
Best of all, the earnings picture was already looking quite good for HD, as
estimates were moving almost universally higher for the full year time frame.
The consensus was also trending higher for this stock, while earnings misses
are pretty rare too.
Thanks to this, HD has a Zacks Rank #2 (Buy), and could see a small increase
for its current quarter earnings too, especially if extreme weather stays
common this winter.
Columbia Sportswear (Nasdaq:COLM-Free Report)
Although Columbia makes a variety of outdoor apparel products, its coats—with
special linings designed to keep the heat in—might see an increase in demand
thanks to the extreme cold. The company also sells a variety of other clothing
items and accessories, and if the weather stays like this for a while, it
could boost demand for COLM's entire lineup of apparel.
Earnings estimates have also been trending higher for this company, as
estimates have risen a little bit for both the current year and the next year
time frames. Analysts seem to be in agreement on the firm's long term
prospects too, as not a single estimate has gone lower for the current year or
next year periods in the past 60 days.
Though COLM is in a rough industry, the stock has secured a Zacks Rank #2
(Buy). And with the winter weather potentially just getting started—and the
Winter Olympics just around the corner—this may be another stock to watch for
further gains in the months ahead.
Bonus: First Trust ISE-Revere Natural Gas ETF (AMEX:FCG-Free Report)
When temperatures are plunging into near record levels, many people had to
turn up the heat and leave it running for quite some time. And when this
happens, many utilities have to tap into natural gas as a fuel to meet this
Thanks to this, we might see an uptick in natural gas usage that far exceeds
normal, leading to a modest increase in prices. While investors can try their
luck with the futures market, a play on natural gas producers might be a lower
risk play, such as with FCG.
This ETF holds a basket of companies in the natural gas space, focusing on
firms in the exploration and production segment. Value metrics, correlation
with natural gas prices, and ROE are all used to rank the stocks, and the top
30 are included in the final portfolio and then the fund.
FCG currently has a Zacks ETF Rank #2 (Buy), and could be an interesting pick
for investors who are looking for more natural gas demand ahead.
Weather has been pretty extreme across much of the country, and it has likely
led to economic losses in many parts of the nation. However, some companies
and sectors do look to benefit from these brutal temperatures and heavy
snowfall, and could actually come out ahead.
Plus, the companies—and the ETF—highlighted above all have Zacks Ranks of 2 or
better. This suggests that they already were looking quite good before the
storms hit, but with the higher demand that may result from the weather, they
may see solid days ahead as well.
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