From the Fire Line to the Bottom Line

OK, so I'm not actually on the fire line. I'm hunkered down in my house -- the smell of smoke is too bad to enjoy the unseasonably warm weather we're having -- hoping the power doesn't go out before I can get you an update about companies based in San Diego that might be affected by the fires.

To the best of my knowledge -- and I've been watching a lot of news over the past three days -- no major companies have been directly affected by the fires (which are also in the Los Angeles area). However, most companies such as Qualcomm (Nasdaq: QCOM), Sempra Energy (NYSE: SRE), and Leap Wireless (Nasdaq: LEAP) will be affected indirectly by displaced employees.

It's estimated that well over 500,000 people have been evacuated during the fire, and most of those people, as you can imagine, aren't going to work. Even people not evacuated -- knocking on my wood desk -- haven't been going to work because of the mayor's plea for people to stay off the roads. Even when businesses do stay open, production can be difficult. For instance, in its earnings conference call on Tuesday, Illumina (Nasdaq: ILMN) management said that it was trying to keep production lines at full capacity, but that displaced employees might cause a "modest impact on production."

Ironically, the companies that may do best after the fires are the homebuilders. You have to look no further than all the direct mailers in my mailbox every week to realize that there's a surplus of new homes in San Diego County.

KB Home (NYSE: KBH), D.R. Horton (NYSE: DHI), and Pulte Homes (NYSE: PHM), among others, might see increased sales as some of the estimated 1,400 homeowners who have lost their houses decide to move rather than rebuild.

Overall, I think that San Diego is going to come out of this disaster relatively OK. Business should get back to normal starting next week; it seems there shouldn't be any major hits to businesses.