Try Toro This Harsh Winter

By Jeff Macke  FEB 12, 2010 12:10 PM

The snow could bring out the best in weather trades.

 


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Greetings from picturesque New York, where the snow has managed to stay bright white for two full days -- as New York snow normally morphs into hideous, mucus-colored, grim slush at the exact instant it hits the sidewalk. Obviously a huge portion of the slime is going to all but leap from the walk to your pant leg, creating a feeling best described as nauseating. Even for a guy who was in a fraternity.

Who do you play when winter is harsher than expected? How about some Toro (TTC)? For you sun creatures, Toro makes snowblowers and lawnmowers. Not one but two businesses fully reliant on weather being “normal." If it’s too warm to snow Toro is jammed with snowblower inventory. If it’s then a rain-free summer they have to stuff the mowers on top of the snowblowers, creating a vicious EPS every so often.

All that said, everything’s coming up roses for Toro and Mr. Plow this year. I’m mulling a position on the long side on a pullback to $38.

While we’re mulling...

Position in JWN, MCD, SDS, DIS, AAPL

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