Big gains can be found under all that snow Six feet of snow in upstate New York. Bitterly cold temperatures not seen since the late 1800s, in Minnesota and Denver. One of the earliest snowfalls ever, for Portland, Ore. Winter is barely even here yet, and it’s already been one heck of a winter. The current respite is nice, but don’t let it fool you. We’re in for another bad one again this year. So as Old Man Winter lulls investors into complacency over the next few weeks with warmer temperatures, you’ll be wise to prepare for another Big Chill, by stocking up on the right kind of natural gas stocks, retailers and snow-equipment companies. That’s because this winter could be one of the three-harshest in the past 50 years, and certainly among the top 10, predicts Joe Bastardi of WeatherBell Analytics. “Late December through March will be the worst,” he says. Bastardi is worth listening to because unlike a lot of forecasters, he called the cold blast and heavy snow that just hit much of the country, and he called last year’s brutally cold winter, too. Some of the best market plays on a cold winter redux include Birchcliff EnergyBIREF, -0.85% United States Natural Gas ETF UNG, +3.30% Dick’s Sporting Goods DKS, -0.02% Columbia Sportswear COLM, -0.52% , Compass Minerals International CMP, -0.77% involved with deicing salt, and Douglas DynamicsPLOW, +8.39% involved with snowplows and salt spreaders. Before we get to more on these investments, exactly why are we going to get socked again? Two words: El Niño. But not just any El Niño, a weather pattern created by higher Pacific Ocean temperatures, which pushes down the jet stream to deliver harsher weather to the U.S.. We’re going to have the same kind of El Niño that produced exceptionally cold, snowy winters in the 1960s and 1970s, and over the past decade, says Bastardi. A high-pressure zone camping over Canada will push the jet stream far enough south to create several bad storms for the East Coast, bringing lots of snow. “We see the potential for quite a few big storms coming right up the coast,” says Mark Paquette of AccuWeather. People along the coast may get spared big snowfalls, because ocean temperatures will be above normal. “A little bit inland they are in for a banner year,” says Paquette. “Where a lot of people live, it is going to be snowier than last winter.” Forecasters expect snowfall well above average in cities Chicago, Philadelphia, Pittsburgh and New York, among others. Here’s a quick look at how to tweak your portfolio to benefit: 1. Energy If you locked a bunch of investors in a room and told them to create the best natural gas company for a cold winter, they’d come up with Birchcliff Energy. The main reason: Unlike most energy companies, it does not hedge its winter month sales, says Brian Boyle, president of Boyle Capital. This means it fully benefits from any spike in natural gas prices caused by the unusually cold winter which we’re going to get. But Birchcliff is relatively “safe” because it is a low-cost producer. It remains profitable even if natural gas falls to $3 per million British thermal units. Natural gas recently traded at about $4.35. “They can make money all the way down to $3 gas, but they will do extremely well north of $4,” says Boyle, whose investment shop owns Birchcliff stock. His views are worth considering because his investments have returned 11% a year since 2004 compared to 7.7% for the S&P 500. A third factor at work here: 85% of Birchcliff’s production is natural gas. Boyle doesn’t hold Birchcliff as a play on a cold winter. He likes it because it’s a relatively cheap energy company trading at a 35% discount to peers, with solid potential. Boyle thinks Birchcliff will grow production 20% a year over the next five years. It’s well-positioned near sites where liquefied natural gas (LNG) export terminals will be constructed in Canada. So why is Birchcliff so cheap? Some investors don’t like the additional volatility that comes with unhedged winter production. The company also has a lot of debt, but Boyle thinks Birchcliff will continue to produce enough cash-flow to cover it. Another play on the unusually cold winter ahead is United States Natural Gas ETF. It’s already up a lot in the past several weeks, to $23.50 from $19, thanks to the recent cold snap. It could retreat as warmer weather returns over the next several weeks. But it should move higher during January through March, when colder weather returns. Right now, investors are not pricing a cold winter into natural gas prices, since natural gas for February and March delivery goes for around $4.50, compared to $6 last winter. Last year’s natural price strength pushed the United States Natural Gas ETF into the upper $27 range. Regardless of the weather, Boyle likes natural gas over the next few years because greater LNG exports will support prices in North America, manufacturers are returning to the U.S. to take advantage of natural gas prices that are more than 50% below prices in much of Asia, and power plants are switching to natural gas from coal. “Over the next several years there will be a lot of support on the demand side for natural gas prices,” says Boyle. 2. Retailers Lots of snow isn’t good for retailers in general, because people stay home rather than shop. But a few that sell lots of cold-weather apparel could do well. One is Columbia Sportswear, which specializes in outdoor apparel, footwear and equipment sold under the Columbia, Mountain Hardwear, Sorel and Montrail brands. Another is Dick’s Sporting Goods, which sells cold-weather clothing from The North Face and Columbia brands, among others. I suggested Dick’s in my stock newsletter in the pullback last May, caused by weakness in golf-related sales, because the right kind of insiders, by my system, stepped up and bought the pullback. 3. Travel and leisure Unusually cold weather might not be good for travel-related businesses like the hotel companies Marriott International MAR, +0.09% , Starwood Hotels & Resorts Worldwide HOT, -0.94% and Hilton Worldwide Holdings HLT, +1.36% . But it should help cruise line companies Carnival CCL, +0.64% , Royal Caribbean Cruises RCL, -0.63% and Norwegian Cruise Line Holdings NCLH, -0.09% . 4. Cold weather gear and supplies Unusually cold and snowy weather could also put a bid under the shares of these companies: Compass Minerals, which sells rock salt; Douglas Dynamics in snowplows and salt spreaders; Arctic Cat ACAT, +0.37% which makes snowmobiles; Toro TTC, -0.48% which sells snow blowers, and GeneracGNRC, -0.64% , which sells generators. Michael Brush