Hot weather good for some

Reported by Mike King, The Motley Fool.
Tuesday, January 15, 2013
Topics in this article:
Asx,Coca-Cola Amatil,Harvey Norman Holdings,Amalgamated Holdings Limited,Ardent Leisure Group,Village Roadshow Limited

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It’s disheartening and saddening to see lives and property lost as Australia’s bush fire season threatens to do far more damage. While one firefighter has died, it’s amazing that given the catastrophic conditions of heat waves, high temperatures and with many fires still burning out of control, that we haven’t seen a greater loss of life – for which I’m extremely thankful.

Still, Tasmanian fires have destroyed an estimated 80 houses, at least 30 homes have been razed in New South Wales, and media reports estimate that around 21,000 sheep have been lost in one fire alone, near Yass, NSW.

According to the Bureau of Meteorology, the last four months, from September to December, were abnormally hot across Australia, with the average maximum temperature the highest ever recorded – with national records going back over 100 years to 1910. Birdsville in Queensland and Leonora in Western Australia both recorded record maximum temperatures of 49.0 degrees Celsius in the last week.

For some companies the heatwave is a boon for their business. Harvey Norman Holdings (ASX: HVN) sells many more air-conditioners when the heat is up. Soft drink and beverage giant, Coca-Cola Amatil (ASX: CCL) sees sales of its products soar as the temperature rises. Ardent Leisure Group (ASX: AAD) will likely report a massive influx of visitors to its theme parks, and air-conditioned bowling alleys, as consumers look to escape the heat.

Likewise, Village Roadshow (ASX: VRL) has reported greater than expected box office sales, as consumers take in a movie in an air-conditioned, cool theatre. Amalgamated Holdings (ASX: AHD) – owner of Greater Union and Event cinemas is also likely to have seen a jump in ticket sales since the heatwave began around Christmas.

The Foolish bottom line

With the Bureau of Meteorology forecasting a dry and very hot summer for much of Australia, on a serious note, we hope to see no further loss of life during the period, and offer our condolences to the firefighter’s family and friends.

For Foolish investors, the next time you are in a movie theatre, or in one of Harvey Norman’s stores, have a look around and see how many people are there and what they are buying. Even if you’re in your local convenience store, ask them how sales of drinks are going. You may not be surprised by the answer, but it may give you a clue for your next investment purchase.

If you only invest in one company this year, make it our “Top Stock for 2012-13.” Operating in two hot markets — one set to double by 2012, the other predicted to grow 5x over the next five years — this stock is a solid growth play that also boasts strong recurring revenue, zero debt, and lots of cash. Get its name and full research case in this brand-new FREE report.

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Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned. The Motley Fool’s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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29/07/2014 18:39Sydney, Australia. 29 July,2014
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