During the campaign, President Trump focused on several key issues, and one in particular he believed would create millions of jobs for Americans; his pledge to spend $1 trillion dollars on infrastructure projects over the next 10 years. This plan included the rebuilding and the repair of America’s crumbling roads, highways, bridges, airports, tunnels, and railways.
In his inaugural address, the newly elected President doubled down on his campaign promise to rebuild America. “We will build new roads and highways and bridges and airports and tunnels and railways all across our wonderful nation. We will get our people off of welfare and back to work, rebuilding our country with American hands and American labor.”
Now, I think we all have seen the vicious acrimony between the two parties during the election process, and after the election, but this is one area where most see common ground between the President and the leaders of the Democratic party. Just a few weeks ago, Senate Democrats unveiled their ten year $1 trillion infrastructure plan that they claim will create 15 million jobs. In this proposal are plans to fix roads, bridges, sewers, railroads, public school construction, the expansion of some ports, and waterway infrastructure.
Further, the near disaster Oroville dam crisis, has recently refocused the spotlight on the need for infrastructure repairs across the nation. According to a 2013 report, of the nation’s 87,359 dams, 14,726 are classified as high hazard potential (this classification means that if one of these 14,726 dams fails, lives will be lost).
Just yesterday, commenting on the Oroville dam situation, White House Press Secretary Sean Spicer stated, “The President has been keeping a close eye on the Oroville Dam situation in California. We’ve worked closely with Doug LaMalfa who represents California’s 1st [congressional] district, where the dam is located, and other state officials to help people who have been impacted."
"The situation is a textbook example of why we need to pursue a major infrastructure package in Congress. Dams, bridges, roads, and all ports around the country have fallen into disrepair. In order to prevent the next disaster, we will pursue the President’s vision for an overhaul of our nation’s crumbling infrastructure.”
Stocks to Pick
We have selected 7 companies that are well positioned to take advantage of any form of infrastructure repair. The group includes three mining companies, two steel producers, and two building products companies.
BHP Billiton Limited (BHP - Free Report) – Zacks Rank #1 (Strong Buy) is a leader in the global natural resources industry. The Group has high-value and industry-leading positions in aluminum, metallurgical coal, thermal coal, copper, ferro-alloys, iron ore and titanium minerals and also has substantial interests in oil, gas, nickel, diamonds and silver.
HudBay Minerals (HBM - Free Report) – Zacks Rank #1 (Strong Buy) is a mining company and engages in discovery, production and marketing of base metals in North and Central America. It owns zinc and copper mines, concentrators and metal production facilities in northern Manitoba and Saskatchewan, zinc oxide production facility in Ontario, copper refinery in Michigan and nickel project in Guatemala. In addition to its primary products, zinc and copper, HudBay also produces gold, silver and zinc oxide.
VALE S.A. (VALE - Free Report) – Zacks Rank #2 (Buy) is a mining company engaged in the mining of iron ore and pellets, nickel, manganese and ferro-alloys, gold, nickel, copper, kaolin, bauxite, alumina, aluminum, and potash.
ArcelorMittal (MT - Free Report) – Zacks Rank #1 (Strong Buy) is the world's leading steel and mining company. With a presence in more than 60 countries, it operates a balanced portfolio of cost competitive steel plants across both the developed and developing world. It is the leader in all the main sectors automotive, household appliances, packaging and construction. The company is also the world's fourth largest producer of iron ore, with a global portfolio of 16 operating units with mines in operation or development.
Nucor Corporation (NUE - Free Report) – Zacks Rank #2 (Buy) manufactures and sells steel products. Principal steel products are hot-rolled steel (angles, rounds, flats, channels, sheet, wide-flange beams, pilings, billets, blooms and beam blanks), cold-rolled steel, cold finished steel, steel joists and joist girders, steel deck, steel fasteners and steel grinding balls. Nucor is the largest recycler in the United States. Nucor and affiliates are manufacturers of steel products, with operating facilities in fourteen states.
Potlatch Corporation (PCH - Free Report) – Zacks Rank #3 (Hold) is an integrated forest products company with substantial timber resources. It is engaged principally in the growing and harvesting of timber and the manufacture and sale of wood products, printing papers and pulp and paper products. Its timberlands and all of its manufacturing facilities are located within the continental United States.
Tutor Perini Corporation (TPC - Free Report) – Zacks Rank #3 (Hold) provides diversified general contracting, construction management and design-build services to private clients and public agencies worldwide. The company operates in four segments: Civil, Building, Specialty Contractors, and Management Services. The Civil segment engages in public works construction activities and the repair, replacement, and reconstruction of infrastructure. The Building segment offers services in specialized building markets, including hospitality and gaming, transportation, healthcare, municipal offices, sports and entertainment, education, correctional facilities, biotech, pharmaceutical, industrial, and high technology. The Specialty Contractors segment provides plumbing, HVAC, electrical, mechanical, and concrete services for the industrial, commercial, hospitality and gaming, and transportation markets. The Management Services segment offers construction and design-build services to the U.S. military and government agencies, and multi-national corporations.
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