January 20, 2017
Many companies are positioned to benefit from an anticipated surge in infrastructure work, however investors hoping see gains in the industry will find that not all companies present a strong opportunity.
Caterpillar (CAT) is a leading construction equipment company, producing equipment that is widely used. It is a global organization, with more than half of its revenue coming from outside of the United States. As of this post date, and since June 2017, its stock price has risen from $70 per share to $93, and is expected to continue to increase. Experts from CRFA Research call Caterpillar a strong buy.
HD Supply Holdings is one of the best-positioned distributors of products used for construction in the infrastructure industry, with entities that cover both waterworks and power solutions. It offers products in water and wastewater solutions, as well as maintenance and repair products. HDS will play a vital role in providing products for future projects, and therefore could be a wise investment.
Not all investors are comfortable investing in individual stocks, and prefer to use exchange-traded funds like iShares Global Infrastructure or iShares Emerging Markets Infrastructure. Stephen Leeb, President of Leeb Asset Management stated, “These ETF's are now ripe for buying as they have under-performed most infrastructure stocks”. Utility stocks usually grouped with bonds are included in these ETF’s, which could account for their recent performance. Leeb explains that because they are deregulated, they are more dynamic.
All financial opportunities should be carefully researched by potential investors.