While Texas auto sales will most certainly suffer in the direct aftermath of Hurricane Harvey, which carved a path through Texas, leaving several dead and dropping 9 trillion gallons of rain, dealerships stand to profit immensely once insurance checks begin to roll in and people seek to replace their flood-damaged vehicles.
According to Marketwatch, Texas accounts for around 9% of U.S. vehicle sales and is the #1 state for truck sales – accounting for 14% of U.S. full-size truck sales.
Via MarketWatch
[D]emand for vehicles “does not disappear,” analysts at B. Riley Research said in a note Tuesday.
A potential dip in auto sales would be a temporary phenomenon, and there could be a “surge in demand from consumers looking to replace flood-impacted vehicles” as people begin to receive insurance checks, they said.
“We would be aggressive buyers of TrueCar Inc. TRUE, +1.15% on any weakness related to news regarding impacted auto sales due to Hurricane Harvey,” they said in a note. They maintained their buy rating on shares of Autobytel Inc. ABTL, -0.39% , but said “the company’s traffic related issues will have a larger impact vs. Harvey.”
Moreover, flooded dealerships stand to benefit as their own flood insurance pays out.
Here are a few more names found in Exodus, sorted by Hybrid score.
Like CPRT
More often than not, with deductibles and increased premiums, collecting on insurance is not really as great as it sounds.