Extreme Weather Provides Investment Opportunities! The 20 hottest stocks in the heat wave | FRIDAY DIGITAL

Extreme Weather Provides Investment Opportunities! The 20 hottest stocks in the heat wave

Glico, Mandom, Hoshizaki, and others, from summer's "regulars" to "unexpected stocks

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The air conditioner sales floor at Bic Camera Shinjuku East Exit Store is crowded with rush demand. In some cases, there are waiting lists for installation work.

Just as the COVID-19 crisis created “nest egg demand,” new business opportunities arise when something unusual happens in the world. This year’s premature arrival of a heat wave could also be considered an opportunity for investment. Compared to previous years, stocks called “summer stocks,” whose share prices rise as the temperature rises, are attracting investors’ attention earlier than usual. This year, we are seeing days of extreme temperatures, so let’s hear what investment professionals have to say about what stocks to look out for when it comes to “heat wave stocks.

First, stocks that are said to be regular summer stock picks. Shigeki Unozawa, a securities analyst, points to the following companies.

Moonbat, Japan’s No. 1 umbrella manufacturer, is a summer stock staple. In addition to demand for general rain goods, demand for parasols is higher than usual this year. This is because men have begun to gain a certain level of civil rights to wear parasols, which is also a favorable trend. In addition, summer is the season for ice cream, but it is believed that ice cream sells better than ice cream when the temperature exceeds 30 degrees Celsius. Among confectionery makers, Ezaki Glico, which is strong in ice cream products such as “アイス no Mi” (Ice Cream Seeds), is a good example.

In the restaurant industry, Hoshizaki, a major manufacturer of commercial kitchen equipment, is showing signs of rising. Although there are concerns about the seventh wave of Corona in urban areas, demand for Hoshizaki should rise due to both the recovery of the restaurant industry and the heat wave.

Other stocks that will be in the spotlight during the heat wave include Mandom, the top runner in men’s cosmetics. Demand for its sunscreen and antiperspirant sheets had been depressed by the COVID-19 crisis, but is now showing signs of an upturn. Currently, Mandom shares are hovering near half of their recent highs, making this a good time to buy.

If it is too hot, you will not have the energy to go outside. The heat wave also has a major impact on leisure and shopping. Securities journalist Hiroaki Konno states, “If the scorching weather continues, people will be less inclined to go out.

If the scorching weather continues, more people will refrain from going out and spend time indoors. Stocks like Nintendo, which have grown due to demand for nest eggs, may come back into the limelight.

The aforementioned Mr. Unozawa also has the following to say.

When the heat becomes dangerously hot, people will refrain from outdoor leisure activities such as swimming and amusement parks, and air-conditioned indoor leisure activities will become more popular. Round One, which operates bowling and karaoke complexes, is a good target, as sales at existing stores have been increasing. It can be predicted that people will be reluctant to go out for shopping, and when it is hot, they will either stay in the neighborhood or go to a general supermarket where they can buy in bulk by car. In this regard, Seven & i Holdings is a brand to watch. The convenience of convenience stores and the Ito-Yokado brand are its strengths.

Which stocks are prepared for natural disasters?

As the drought continues, water shortages are a concern. This year, restrictions on water intake and reduced water supply were implemented as early as this year, mainly in western Japan, and although the “return of the rainy season” in early July temporarily resolved the problem, concerns remain before the summer season begins. Market advisor Hideo Amano points to stocks related to water shortages during the heat wave.

Premium Water Holdings, which delivers mineral water to households, is currently rising sharply,” he says. The company’s financial results for the fiscal year ended March 31, 2010, showed record profits, and the company’s growth potential is also increasing. In addition to dividends, the company’s shareholder benefits, which include a choice of catalog gifts, are also well-received and will attract even more purchases from retail investors if water shortages become more serious nationwide.”

On the other hand, as was the case during the record-breaking heat wave of ’18, the risk of natural disasters such as guerrilla rains and typhoons increases in years of severe heat. In such cases, the focus of attention is on infrastructure-related issues. Mr. Norifumi Okayama, President of Marketbank, picked up the following two stocks.

Shobond Holdings is the largest concrete repair company and is involved in various social infrastructures such as bridges, tunnels, and highways. In the unlikely event of a natural disaster such as a landslide, the durability and safety of infrastructure will be pointed out, and companies involved in repair and maintenance will become more valuable. Light Industry has a strong track record in slope slope construction and ground improvement, which artificially reinforce slopes, and like Shobond HD, it should be held as a stock related to natural disasters.

Finally, are there any “unexpected stocks” that may benefit from the heat wave? Mr. Amano, the aforementioned “Surprising Stocks” that may see their performance increase due to the heat wave?

Amano said, “Prolonged exposure to air conditioners can cause dry eyes. Tsubota Labo, which just had its IPO (initial public offering) in June this year, develops supplements and medical devices to improve myopia, presbyopia, and dry eyes. Rohto Pharmaceutical is a major shareholder, and it is an attractive low-cap stock.
Another “hot stock” is ALBERT, which is expanding its track record in big data analysis. I think it falls under the category of a “heat wave stock. This company is developing a business that uses weather data provided by the Japan Meteorological Agency to help forecast electricity demand and optimize food procurement in the restaurant industry. In terms of power shortages, Mitsubishi Heavy Industries, which undertakes the manufacture of nuclear power plants that are increasingly being discussed for restart, may be a good buy.

This summer, it is difficult to predict how severe the abnormal weather will become. We would like to keep an exhaustive list of “hot-weather stocks,” from solid stocks to those that will make money when the wind blows.

The heat wave has shifted people’s focus to indoor leisure activities rather than outdoor activities. The return of the “nest egg” demand could lead to sales of Nintendo game consoles and other products.

From the July 22, 2022 issue of FRIDAY

  • PHOTO Kyodo News, Jiji Press

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