Cramer: These stocks will get a boost as Texas rebuilds after Harvey
By Elizabeth Gurdus
August 30, 2017
“Mad Money” host Jim Cramer lists some companies that are likely to benefit from the mass reconstruction after Harvey. For Cramer, the main market-moving theme was Hurricane Harvey and the nationwide push to rebuild Texas after the devastating storm. Now, Cramer expects potentiallytens of billions of federal dollarsto flood Texas as the waters recede, especially because it is such a largely Republican state.
The massive reclamation project in Houston will likely deliver a boost to an array of companies related to rebuilding, the "Mad Money" host said.
From companies dealing in homebuilding materials likeWeyerhaeuser,Louisiana-PacificandUSG, to road aggregate companies like Martin Marietta Materials, to roofing — the specialty ofOwens CorningandBeacon Roofing— Cramer is anticipating a lift across the board.
"The rebuilding effort will be so enormous that, while the hit to the U.S. economy from Houston short-term going offline will be noticeable, it will also be very ephemeral compared to what will happen when the reclamation project begins," the "Mad Money" host said.
"This could even extend to a spike in autos and truck sales, as the Houston Automobile Dealers Associated says there could be half a million vehicles damaged by the storm," Cramer continued. "Can they be replaced? Of course, because they have insurance, which means there'll be lots of new orders, somethingWarren Buffettalso hinted at today when he mentioned theliabilities of his own auto insurer, Geico."
And unlike Hurricane Katrina, do-it-yourself retailersHome DepotandLowe'salso have a chance to take part in the gains, Cramer said.Cramer said the main difference is how organized and under-control the post-Harvey rebuild will be versus the reconstruction post-Katrina, which, in some areas, is still ongoing.
Questions:
- Why do you think that Cramer believes the fact that Texas is heavily Republican will have an impact on reconstruction?
- Cramer expects the hurricane to provide a boost to companies that provide homebuilding materials, road-building materials, do-it-yourself retailers, and auto dealers. Which of these industries do you think will see the impact first? Which will see the biggest impact? Explain.
- Do you think this is a good time to invest in insurance company stocks? Why or why not?