1 Stock to Thrive After Hurricane Sandy

Updated

While the full economic impact of Hurricane Sandy isn't yet known, it has been estimated to be as high as $50 billion. However, the effects of the storm aren't evenly distributed. While many companies will take a serious hit, whether through being forced to repair or replace damaged assets or simply through losing customers during the storm, other companies are poised to benefit from helping to rebuild after the storm.

Some of the biggest losses incurred will be borne by insurance companies. Many damaged cars, for example, will be covered by auto insurer GEICO, a subsidiary of Warren Buffett's Berkshire Hathaway (NYS: BRK.B) . Berkshire has many insurance operations, in fact, including a reinsurance businesses for catastrophic losses that may be especially hard hit by an event like Hurricane Sandy. When homeowners rush out to Home Depot (NYS: HD) or Lowe's (NYS: LOW) to buy supplies to repair the damage to their properties, it might ultimately be Buffett that's footing the bill.

Beyond private homeowners, infrastructure providers have extensive repairs to make to their own systems. With lower Manhattan and millions of homes throughout the New York metropolitan area lacking power, gas and electric utility provider Consolidated Edison (NYS: ED) has a lot of work left to do.


Public agencies such as state and local governments and transit authorities have downed trees to clear, roads to clean, and tunnels and bridges to get back in working order. One company with a hand in all of this rebuilding is Caterpillar (NYS: CAT) , the world's largest manufacturer of heavy equipment. As a diesel-fueled generator provider, Caterpillar has already supplied 100 megawatts' worth of portable generators to customers in the greater New York City area, and it has prepared many more for mobilization as local authorities determine priorities.

Further out, governments, utilities, and private builders alike will need Caterpillar's construction equipment. Flood-damaged homes beyond repair must be cleared away, and new foundations must be set to rebuild. In some areas, washed-out roads and rail tracks will need new beds and need to be relaid. Earth movers will even be needed for restoration efforts along damaged beaches, harbors, and coastlines.

While Caterpillar can provide the equipment needed to rebuild after the storm, the company is also structured to be profitable in any environment.

Caterpillar is the market-share leader in an industry in which size matters, and its quality products, extensive service network, and unparalleled brand strength combine to give it solid competitive advantages. Read all about Caterpillar's strengths and weaknesses in our brand-new report. Just click here to access it now.

The article 1 Stock to Thrive After Hurricane Sandy originally appeared on Fool.com.

Fool contributor Daniel Ferry owns shares of Berkshire Hathaway and Caterpillar. The Motley Fool owns shares of Berkshire Hathaway. Motley Fool newsletter services recommend Berkshire Hathaway, Home Depot, and Lowe's. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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