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How to Profit from the California Floods

Jeff Siegel

Written By Jeff Siegel

Posted February 5, 2024

Check out this image …

windtruck

This is a picture of a truck that was literally blown over by the wind in West Sacramento.

Apparently, wind speeds in excess of 60 mph can do that.  

Overall, the state of California has been getting pummeled by this latest storm, which is not only producing winds strong enough to put down a semi, but it’s also producing floods that are now being called life-threatening. 

Not that the Golden State hasn’t had to battle catastrophic flood conditions before.  In fact, in 1862, California was hit with flooding that was so bad, 4,000 people died, 200,000 heads of cattle were destroyed, and the state actually went bankrupt. 

Property damage clocked in at $100 million, which today, would be the equivalent of more than $3 billion.

Of course, in 1862, the population of California was only about 500,000.  Today, it’s more than 39 million, and the state is the fifth largest economy on the planet, exporting more than $185 billion worth of goods to the world.

Make no mistake: it’s not just about property damage, it’s also about the impact this flood will have on the state’s economy.  With a gross state product in excess of $3.2 trillion, this doesn’t just affect just California, it affects the world. 

As investors, this absolutely represents a crisis = opportunity scenario. 

Particularly when it comes to water infrastructure. 

Extreme Weather, Extreme Profits

Now I’ve written about this before: investing in water infrastructure companies that will absolutely benefit from the increase we’re now seeing in extreme weather events.  Floods, droughts, arctic polar vortices, and just decades-old pipes that are cracking under the weight of antiquity, 

Of course, it’s like pulling teeth to get folks excited about water infrastructure.  Indeed, it can be a boring topic, but there’s nothing boring about the profit potential of water infrastructure in a world where extreme weather events are no longer outliers, but instead, commonplace. 

To be sure, I’m not talking about water utilities, but instead, the companies that manufacture and sell things such as pumps, pipes, valves, and treatment systems.  Some of these companies include, but are not limited to …

  • Franklin Electric (NASDAQ: FELE)
  • Watts Water Technologies (NYSE: WTS)
  • Badger Meter (NYSE: BMI)
  • The Gorman-Rupp Company (NYSE: GRC)
  • Mueller Water Products, Inc. (NYSE: MWA)
  • Flowserve Corporation (NYSE: FLS)
  • Advanced Drainage Systems (NYSE: WMS)
  • Xylem (NYSE: XYL)

There are a number of water infrastructure ETFs you can check out, too, such as …

  • The Global X Clean Water ETF (NASDAQ: AQWA) 
  • The Ecofin Global Water ESG Fund (NYSE: EBLU)
  • Invesco S&P Global Water Index ETF (NYSE: CGW)

I’ll be diving into water infrastructure stocks a bit more this year, so keep an eye out for new analysis, as well as a couple of new stocks that’ll help you make a few bucks from an incredibly boring, yet incredibly valuable market. 

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