• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

15 Stocks That Will Support the Coming Infrastructure Buildout

We are talking about a finessed, intelligent approach to what we see happening in real time.
By STEPHEN GUILFOYLE
Jun 16, 2020 | 10:34 AM EDT
Stocks quotes in this article: CAT, DE, URI, MLM, VMC, USCR, WY, WM, T, VZ, AMT, MRVL, ADI, AWK, ERII

The next economy? We have already run through a number of differing economies as well as economic possibilities. We've had the virus economy, the "stay at home" economy, the "work from home" economy, which is not the same thing. We have also tried to play our cards right, or at least protect the hands we hold by setting up the "rebound" economy, or simply just holding higher levels of cash as high dividend paying stocks suddenly became less reliable. Now, investors must prepare a new slice of their portfolios that they might have had ready to go in the wake of the 2020 national election, and then had to re-allocate those resources as time wore on, and as that idea (good at the time, better now) simply faded. Where are we going with this? Infrastructure. The build-out. Surely there will now be bipartisan support for such spending. The arguments will be over the size, and then maybe even the focus, but the willingness to extend deep deficit spending? No longer an issue. Not now.

What We Know

We know that House Democrats had already put together a $500 billion, five year infrastructure build-out proposal. We also know that President Trump has long wanted to get an infrastructure rebuild together, really since before he was ever elected. Now, with an economy hampered by the negative impact of a global pandemic that forced a series of government mandated economic shutdowns, and as regional leaders try to roll back that shutdown, there is but one obvious "go to" after the monetary pipes are all laid.

That "go to" would be not a fiscal support package, but a fiscal stimulus package. Stimulus does not just bridge gaps in cash flow through the use of increased debt-load, but actually uses the spent money to provoke a multiplier effect. This means job creation. What to do, when the private economy needs to be convinced to invest? Spend public funds on building, on repairing, and if possible on innovation. Job creation. Multiplier effect. Bingo.

So, one thinking about investing in such an idea, once the dust settles because I really don't think one (or at least this one) wants to chase lusty headlines well ahead of such proposals taking the form of action. It is likely that there will be no next fiscal package out until later this summer. Between now and then, my guess would be that either through data or the spoken words of leadership, there will still be some down days ahead, and perhaps with them, better opportunities for either entries or adds.

Ideas

Investors are fairly sure where Washington wants to go with this. Modernizing transportation would be imperative. That means modernizing airports, maybe modernizing the rails. repairing aging bridges, or building new ones. Repairing or widening roads, particularly in congested areas. After transportation, comes communications. This means the build-out of 5G technology with a sense of urgency, especially as it is understood that the Chinese are ahead of us in this space. Beyond that, there are still plenty of locales in these continental United States where broadband is unreliable, or cell service is non-existent. At this point, that is really unacceptable.

If they are going to build, then they are going to hire. The equipment that this renewed public demand for labor will operate will be manufactured and sold by Caterpillar (CAT)  and Deere (DE) . That equipment will be leased by a firm like United Rentals (URI) . In fact, of all the names mentioned in this piece, that one may be for me the most obvious dip purchase next time I see that fat pitch. What are they going to do with these large vehicles? They are going to move earth, and they are going to move materials. This brings in some old, but not forgotten past favorites such as Martin Marietta (MLM) , Vulcan Materials (VMC) , and US Concrete (USCR) . Throw in a Weyerhaeuser (WY) while you are at it. They'll need lumber too. Then, as always there will be a need for carting services. In short, garbage removal. Waste Management (WM) , that one will be a must.

Let's move on past the kind of construction that would have made President Eisenhower proud. Let's talk about cell towers and expanding the wonders of the internet, as well as the still unknown that is 5G technology. Now, we need American Tower (AMT) , we need not not just telecom providers like Verizon (VZ) and AT&T (T) , but we're going to need the firms that can provide these firms with the guts of the whole operation. We need Marvell Technology (MRVL) and Analog Devices (ADI) .

It has not been mentioned broadly, but what about the Utilities, or more specifically, water based utilities providing such necessities as purification and/or desalination. Suddenly American Water Works (AWK) , and the much smaller, but I will mention it because it is in the "Stocks Under $10 '' portfolio... Energy Recovery (ERII) just became more interesting.

The Path Chosen

My thoughts? At this point, with positive news regarding the treatment of Covid-19 supporting early trade on a day that was already set to lift off, I think it becomes clear. If one is now over-exposed to cash, or the work from home trade, or the pantry, the time has come to carve or "re-carve" a slice of the portfolio under the headline "Infrastructure." Sure the names will be industrial, and reliant upon the economic growth that they themselves will be trying to provoke. That said, we're not talking about aggression, we are talking about a finessed, intelligent approach to what we see happening in real time.

(Waste Management, Verizon, and Marvell Technology are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Stephen Guilfoyle was Long MRVL, VZ, T equity. SU $10 position: Long ERII equity.

TAGS: Economy | Investing | Jobs | Markets | Politics | Stocks | Trading

More from Investing

In This Market, If You Can't Beat 'Em, Join 'Em

James "Rev Shark" DePorre
Jan 26, 2021 5:50 PM EST

There is no way to know how long this theme of strong small-cap speculation and short squeezes will continue, but I have no interest in fighting it.

Is Live Ventures Taking Notes From GameStop?

Bruce Kamich
Jan 26, 2021 3:09 PM EST

Let's see what we might glean from the charts.

Ranpak Holdings May Double or More in 2021

Bruce Kamich
Jan 26, 2021 2:35 PM EST

Here's what aggressive traders should look for.

Jim Cramer: Ready, Set, Go!

Jim Cramer
Jan 26, 2021 1:30 PM EST

Here's why you should wait for a dip -- not the vaccine glut -- to start buying.

Let's Dare to Take Another Look at GameStop

Bruce Kamich
Jan 26, 2021 1:25 PM EST

Here's what we found in the latest GME charts.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:35 AM EST CHRIS VERSACE

    Another Big Winner for Stocks Under $10

    We're ringing the register Tuesday morning.
  • 08:05 AM EST GARY BERMAN

    Tuesday Morning Fibocall for 1/26/2021

    SPX (Long-Term View) The 1/21/21 NEW high @ 3861...
  • 09:52 AM EST GARY BERMAN

    INDU/DIA 20 DMA

    Fibocall: The DIA has the 20 DMA @ 307.81 and w...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login