The recent hot weather got me thinking about which shares would be a good long term bet, based on the notion that we will experience more and more periods of high temperatures. My personal thoughts were that water companies (both the utilities and bottled water companies) and manufacturers of air conditioning would do well.
Luckily, The Telegraph asked some real experts their own thoughts on the subject. These are the shares that they came up with, and some of their thoughts:
- Sales of water butts have gone crazy and one of the biggest suppliers is Straight. Sales of its water butts are up 400 per cent year on year.
- Halma Water Management, a specialist in leak detection equipment, pressure controllers and loggers to manage and control water supply networks.
- Construction companies such as Balfour Beatty, Carillion and Keller will benefit because climate change will have a significant impact on infrastructure such as sea defences and sewerage systems.
- Punch Taverns & Wolverhampton & Dudley breweries.
- Unilever is Britain’s biggest producer of ice-cream.
- Boots, our favourite supplier of sun creams, pharmaceuticals and other such holiday ‘gumph’, as well as where we like to get our photographs developed.
- Companies such as Drax Power and International Power would stand to benefit – if there is more demand for electricity (because of increased use of air conditioning), the price goes up.
- Magners, the cider you drink with ice, is going down a storm in the hot weather. C&C, its manufacturer, is using a proven distribution and marketing format.
- Electricity generators will benefit but there is a drive for the power to be greener, with lower carbon emissions. One way to play this is via Climate Exchange – a stock exchange for trading carbon dioxide allowances, which is listed on Aim.
- Alternatively, British Energy has zero carbon emissions because it is nuclear – so that is another play.
- GET Group should be benefiting from the heat wave. It imports air conditioners and fans from China and distributes them to its retail customers.
So air conditioning and water companies were in there, but as you can see, there are a much wider range of industries that will benefit from heatwaves.
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