Shares of Forterra Inc. (NASDAQ:FRTA) jumped as much as 32.5% in trading Thursday after the pipe manufacturer announced a new chief financial officer. There could also be some speculation that this will be a good infrastructure play as more hurricanes move toward the U.S. By 3:30 p.m. EDT, the stock had settled to a 21% gain for the day.
The only real announcement was that Charlie Brown, formerly CFO of Oldcastle Materials Company, will join the company as CFO. Former CFO Matt Brown has resigned "to pursue other opportunities."
What may be having more impact on the stock is an agreement last night between President Trump and Congressional Democrats to provide $7.85 billion in for Hurricane Harvey aid. And with Hurricane Irma making its way to the heart of Florida, there may be more infrastructure to repair ahead.
There could be hundreds of billions in damage in the U.S. this year from hurricanes, and cities will be looking for stormwater management systems and piping to rebuild. That could lead to a boom in demand for Forterra over the next few years, from which it should be able to profit handsomely. I don't think that's yet a reason to buy the stock, but it could drive shares over the short term. Traders who look for opportunities when natural disasters strike don't stick around for long, and unless Forterra's fundamental business improves, any hurricane-related windfall will be a temporary help for the stock as well.