Snow (And Ice) Crush The South
I thought about talking about the weather last week.
But I didn’t know what we were going to get.
Or if I would even have power!
Last week, the South got hammered with snow and ice.
I live in North Carolina and we came out okay.
A few inches of sleet, which then froze into ice.
Very few lost power in my area, but the roads are a mess.
My kids have been out of school all week!
And we got another 4 inches over the weekend, which isn’t helping the cleanup.
Their schools haven’t confirmed yet, but I think my kids will be home the next few days as well.
All of these snow days got me thinking about which companies could benefit from all the terrible weather.
And here’s the list I came up with.
A lot of people across the South are stuck at home because the roads are so bad.
And they’re all using Zoom Communications (ticker: ZM) for their meetings.
Zoom was huge during the COVID-19 pandemic.
But once everything opened back up in 2021, Zoom’s stock price crashed 90%.
However, Zoom is making a comeback.
Over the last 6 months, Zoom’s stock price is up over 20%.
What’s causing the comeback?
Zoom is developing Artificial Intelligence (AI) tools to use in online meetings.
And it’s driving major profit growth.
Last quarter, Zoom reported over $600 million in profit, which was almost 3x higher than the previous year.
Plus, Zoom’s current 17x price-to-earnings ratio is near an all-time low for the company.
Food is a major issue during any kind of storm.
With so many people stranded, everyone needs to stock up.
Ingles Markets (ticker: IMKTA) is on the smaller side of grocery stores.
It only operates around 200 grocery stores, but most of them are in Georgia, Tennessee, and the Carolinas.
The shelves at many of my local stores were almost empty, which is more money for stores like Ingles.
And with another storm hitting the region, we were back to stocking up again.
Ingles lags behind some competitors in terms of profitability, but the company barely has any debt.
Its debt-to-equity ratio of 0.34x is one of the lowest among retailers.
And Ingles’ price-to-book of 0.84x is near an all-time low.
I grew up in the Northeast, so I have experience driving in snow and ice.
My neighbors, however, did not, which is leading to a lot of stranded and damaged cars.
Those vehicles will need to be replaced, which brings us to AutoNation (ticker: AN).
AutoNation is the second-largest car dealership in the United States, with many dealers located in southern states like Texas and Georgia.
AutoNation has had incredible growth recently.
Over the past decade, AutoNation’s revenue has grown on average by 14% every year.
Plus, AutoNation’s forward price-to-earnings ratio is only 10x, which is much lower than its industry average.
What are some of your favorite snow stories?
Send me a message with your best.
Coach Parker
Category: Stocks
