Posted on 21 July 2012.
While many markets tend to see thin trading volumes during the hot season, summer stock investments still go up and down as if the calendar reads September or March. It also needs to be remembered that summer is the equivalent of a three-month long Christmas season for many specialized companies. Movie studios, for example, sell many tickets during the summer, but the financial information is not fully tabulated until back to school time rolls around. Amusement parks, particularly ones featuring water rides to cool off from this summer’s devastating heat wave, are another category that makes a lot of money while the financial professionals are all away on vacation.
Keeping an eye on summer blockbuster movies and the studios that produce them is one way of playing the summer stock game. Walt Disney (DIS) often has a strong lineup of new summer films aimed squarely at today’s bored, hot kids. Not only is the stock heading into its strongest season of the year, it remains a huge analyst favorite for any time of the year.
Summer is also prime time for Six Flags Entertainment Corporation (SIX). The company operates a host of amusement parks all across the country and has seen its stock price rise steadily all year long. A visit to Six Flags is practically synonymous with summer in many parts of the nation.
With a summer that has been setting temperature records everywhere, air conditioner manufacturers are likely to report strong sales at the end of Q2. Ingersoll Rand (IR: US) is not a name typically associated with air conditioning, but their acquisition of well-known manufacturer Trane makes them a stealth player that others may not think of when it comes to profiting from summer heat.
Smart summer stock picks can help pay the utility bill when the weather turns to the other end of the thermometer.
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