(BFM Bourse) – While the mercury is currently desperately low, BFM Bourse has drawn up a short review of the securities which, in the more or less long term, could be worn by a harsh winter.
France and Europe have rediscovered the cold in winter in recent days. Temperatures are now moving into the negative over much of France, with a level close to -10 degrees Celsius in northern France on Tuesday. Central and Eastern Europe also experience inclement mercury with sub-zero temperatures.
Assuming that Europe experiences a harsh winter, which listed companies could benefit from a cold spell in the short and medium term?
“The cold induces more gas consumption and therefore higher gas prices and, by extension, electricity prices – electricity prices set at the margin of gas prices. ‘utilities’ compartment (of services to communities, Ed.) We can therefore think that a cold snap would thus benefit gas producers such as [le groupe allemand] RWE and to a lesser extent Royal Dutch-Shell or TotalEnergies”, explains Nicolas Descoqs, financial manager at Clartan associés. “Engie, for its part, does not produce its own gas and would not benefit from such a movement”, adds- he.
“Electricity producers such as Iberdrola and Enel could also benefit from a cold spell, but this can be a double-edged sword because the positive effect depends on long-term contracts with customers, who have been able to obtain supplies at lower cost”, continues the manager.
“We can also think of our French champions Rexel and Legrand, who provide a lot of smart electrical systems for the home, which make it possible to heat better and consume less. With products such as sensors, which facilitate better control of heating in this or such a room in the house”, also explains Nicolas Descoqs.
Potential winners in the wood industry
“Marginally, this can also benefit the Finnish Stora Enso, which – although this activity is not the most important – also produces construction wood, but wood is a very good thermal insulator”, continues the manager.
In the same universe, we find, in France, the discreet Moulinvest. This company manufactures a wide range of structural and roofing wood for the construction sector, as well as solid wood walls for timber frame houses. Wood processing also generates waste (sawdust and chips) which is then recovered by its subsidiary Moulin Bois Energie into wood pellets for individual and collective heating.
In addition to Moulinvest, Cogra or Eo2 would also be likely to benefit from increased household appeal for wood energy in the face of soaring prices for “traditional” energy, including gas, fuel oil and electricity. We can also cite Poujoulat, another value which can indirectly benefit from a potential rise in energy prices, because this group founded in 1950 provides, in particular, equipment dedicated to heating via the combustion of wood pellets. This company is the European leader in metal chimneys and roof outlets.
For Pierre Laurent, analyst at EuroLand Corporate, this wood sector benefits in the long term from “exciting” prospects because “wood (and its players) should be one of the big winners of the inevitable ecological transition”.
Down jacket producers in sight
“Several stocks can benefit from a cold snap. On a short-term view, we can think of consumer goods that provide protection from the cold, such as suppliers of down jackets, so for example Damartex or perhaps Moncler”, emphasizes Frédéric Rozier, portfolio manager at Mirabaud France.
An Italian company listed in Milan, Moncler specializes in down jackets and ski clothing. This group is often associated with the world of luxury with a high operating margin, nearly 20% in the first half.
Less glamorous, we find in France Damartex, the parent company of Damart and its anti-cold clothing. With the drop in temperatures, the French wanted from October, to anticipate government measures of energy sobriety and rush on warm clothes including the famous Thermolactyl from the Damart brand. This “second skin” which keeps the heat in made the heyday of the Damart brand and even seduced Princess Diana, who originated the famous slogan “Cold, me? Never!”.
In the same sector, the Canadian Canada Goose is listed on the Toronto Stock Exchange.
Renovation and insulation
“In the longer term, households can realize that there are significant needs for insulation of habitats, which can support specialists in the sector like Saint-Gobain”, also notes Frédéric Rozier. “We can also think of the Irish Kingspan which produces energy insulation solutions in particular for commercial buildings, offices”, adds Nicolas Descoqs.
Beyond insulation, a cold spell can also be an opportunity for households to want to renovate their homes, which is the cornerstone of the strategy of Hexaom, the builder of individual houses. The former Maisons France Confort intends to strengthen its renovation for individuals in a context of hunting for thermal sieves. Moreover, all the brands of the group will have to get in step by generalizing an “energy renovation” offer. By 2025, the group aims to increase the share of renovation in its turnover to 30% against 18% currently.
By Sabrina Sadgui and Julien Marion
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