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Profiting On the Rebuilding Boom
By JLP | September 25, 2007
The October 1, 2007 issue of Fortune took a look at ways for investors to cash in on the rebuilding boom (fixing bridges, roads and the general infrastructure of the nation). Here’s some stocks they mention (NOTE: I’m not recommending these stocks, just mentioning them. Invest at your own risk.):
Granite Construction (GVA) – one of the nation’s largest civil contractors, specializes in roads, bridges, and mass transit. It figures to be a major beneficiary of Safetea-LU, the 2005 law that provided $244 billion for projects that improve safety, reduce congestion, and protect the environment across the nation.
General Cable (BGC) – develops, designs, manufactures, and distributes copper, aluminum, and fiber-optic wire and cable products. It is among the top global wire and cable companies and the market leader in the three segments it competes in – energy, industrial, and communications.
Greenbrier (GBX) – makes and leases railcars that transport everything from grain to liquefied gas. It is the leading manufacturer of the “intermodal cars,” which carry the large freight containers used on trucks and ships.
Wesco (WCC) – the nation’s leading electrical supplies and equipment distributor. In this highly fragmented market, Wesco and its top three competitors account for only 20% of all sales, but Wesco’s aggressive acquisition strategy (29 deals since 1995) has made it the only national player. It has a solid balance sheet and plans to continue buying up smaller rivals.
For more reasons on why Fortune thinks these are worth looking at, read the article.
If individual stocks aren’t your cup of tea, you could look at the iShares Dow Jones U.S. Industrials ETF, which is comprised of 270 different companies from the following sectors:
Aerospace & Defense
Construction & Materials
Electronic & Electrical Equipment
General Industrials
Industrial Engineering
Industrial Transportation
S-T Securities
Support Services
The iShares Dow Jones U.S. Industrials ETF is one of the ten sectors that make up the Dow Jones Total Market Index.
Topics: Investing | 6 Comments »
September 25th, 2007 at 5:03 pm
Thanks for the post – Great blog, by the way.
I’ll take a look… I’m planning on buying a few ETF’s after I get my debt paid off in a few months so I’ll definitely do some research on some of these.
September 25th, 2007 at 5:32 pm
These names are definitely interesting and I really like GVA. I also think that FLR, JEC, and MDR deserve mention as great infrastructure plays. The infrastructure bull market appears like it is continuing. The rebuilding boom is very real.
September 26th, 2007 at 8:27 am
It could be too late for the big upswing on these plays unless you think the boom will get bigger (which it certainly could, but that would be speculative unless you do your own thinking and conclude that out of the bridges they didn’t yet inspect there will be a lot more bad news for example). By the time they are published they are usually too late. Example: sometimes you can make arbitrage money by purchasing last night’s Kramer stock picks right at opening, wait for the late-comers to run it up a few % and then sell maybe an hour into the day making a couple of $.
September 28th, 2007 at 1:30 pm
Wesco (WCC) CEO, Roy Hayley, is a brilliant guy who came on board when the stock was trading around $4 a share just a few years ago. I knew him when he worked at American General in my hometown. He’s smart, driven, MIT grad with a personality and super attention to detail. And the stock has dropped from $71 to $43 this year, so it’s 40 percent cheaper than it was in early 2007.
October 26th, 2008 at 9:36 am
[...] profiting on the rebuilding boom wesco (wcc) – the nation’s leading electrical supplies and equipment distributor. in this highly fragmented market, wesco and its top three competitors account for only 20% of all sales, but wesco’s aggressive acquisition strategy (29 … [...]
October 27th, 2010 at 1:08 pm
electrical supplies are always available in our local hardware dealer at a discounted price`~*