The recovery from Katrina and Rita ushers in a new era of

Disaster Recovery and Prevention. Governments and people are

rethinking their response to disasters and the steps they can

take to prevent or minimize the worst consequences. The biggest

catalyst for this new era is the political fall-out from

Katrina.

The slow response to Katrina was a black eye for the Bush

administration. For Michael Brown, the ex-head of FEMA, it was

a national humiliation. The fates of Louisiana governor

Kathleen Blanco and New Orleans mayor Ray Nagin remain to be

seen, but reports have pointed out their failures in prevention

and response, and that will come into play at election time.

President Bush wants to make up for the bungled response (and

restore some political capital)and has earmarked a recovery

effort that may total $200 billion dollars. The early response

to Katrina has become a cautionary tale for politicians and

bureaucrats in federal, state and local governments, and you

can be sure they will be pushing for more disaster prevention

spending in their own particular fiefdoms. And the media is

keeping watch—newspapers in California have been filled with

stories warning about the lack of disaster (especially

earthquake) preparation in the state.

The Army Corp of Engineers, burned by the lack of

follow-through on their recommendation to raise the New Orleans

levees, is now looking to repair vulnerable areas around the

country. And they’re not the only ones.

New homes have multiplied along vulnerable coastal areas. From

Florida to the Outer Banks up to The Hamptons and all

throughout the east coast, coastal property values have soared.

Dune Road, a sliver of land with pricey homes between the ocean

and a bay in Westhampton, New York, was virtually wiped out by

flooding little more than a decade ago. Now it has been rebuilt

with even pricier multi-million dollar homes. You can be sure

these homeowners will spend what it takes to protect their

properties.

And they may need to because it looks like big storms are

brewing. If many meterologists are correct, we may have entered

a cycle of increasing frequency and severity of hurricanes.

Combine the measures slated for homeland security, rebuilding

the Gulf coast and the ramp-up of disaster prevention around

the country and you have a near permanent state of disaster

recovery and prevention.

For some companies, let’s call them Hurricane stocks, the

opportunity to take part in the Gulf recovery means a great

deal of more business in the short term. For others, it may

mean more business for many years to come.

Hurricane stocks are companies that are needed right now. For

instance, the immediate need to help those whose homes have

been destroyed or are unhabitable. Think of companies that

provide temporary living and survival gear. Think of Coleman

camping products, such as tents, sleeping bags, portable

stoves, flashlights. Coleman is owned by Jarden (JAH:NYSE).

Manufactured homes have come a long way in the past decade, and

will prove to be a good temporary solution for many and a

permanent solution for others in the Gulf. Cavalier Homes

(AMEX:CAV) has been contracted to build and deliver

manufactured homes to the Federal Emergency Management Agency

to house Gulf Coast residents displaced by Hurricane Katrina.

The contract is expected to generate $58 million to $63 million

in revenue for the company.

Some other compnnies in this sector include Champion

(NYSE:CHB), which partners with nearly 3,000 independent

retailers, builders and developers, Fleetwood Enterprises

(NYSE: FLE) and Coachmen Industries Inc. (NYSE:COA).

Oil and gas facilites in the Gulf coast also need emergency

repair. The economy of the Gulf Coast and, to an extent, the

economy of the U.S. depends on it. A number of drilling rigs

were damaged in the storms, which means that a company like

ENSCO (NTSE:ESV) which owns drilling rigs in the area, will be

in big demand. Oceaneering International (NYSE: OII), which

inspects and repairs underwater infrastructure of oil

facilities, will be busy, as will Jacobs Engineering

(NYSE:JEC), providing engineering and construction services to

oil and gas companies.

Rebuilding the Gulf Coast

Rebuilding will include the big dogs in construction, like

Halliburton (NYSE:HAL), The Shaw Group(SGR) and Caterpillar

(NYSE:CAT). But many smaller companies will also take part,

often as subcontractors. The Army Corp of Engineers has

increased its task order from $10 million to $20 for Aduddell

Roofing, a subsidiary of Zenex International, Inc.

(OTCBB:ZENX). National Storm Management (NLST:PK), an expanding

national construction company specializing in storm restoration

management, will also do a good deal of restoration work in the

Gulf Coast.

To build you need building materials. Home retailers such as

Home Depot and Lowe’s will be seeing their orders increase, but

so will companies that provide raw materials like timber. Take a

look at Rayonier (NYSE:RYN)and Plum Creek Timber (NYSE:PCL), two

REITs that own and manage timber properties.

Some Hurricane and rebuilding stocks have already jumped and

retreated. But the point to remember is that while the

hurricanes resulted in an immediate need to help those in dire

need, they also ushered in a new era, an era when governments

and people in the U.S. and around the world know they can do

more to recover from disasters and minimize the consequences.

So keep an eye on companies that will be at the center of the

Disaster and Prevention theme for years to come.