Infrastructure Bill Beneficiaries Index Finally Advancing

A large number of companies should benefit considerably from the business that will be generated by the passage of the $1.2T infrastructure bill and 12 of them are tracked in munKNEE's Infrastructure Bill Beneficiaries Index. Surprisingly, we had not seen much appreciation in the stock prices of its constituents until just this past week.

The Bipartisan Infrastructure Deal (Infrastructure Investment and Jobs Act) was passed by Congress on November 6th, 2021, and signed into law by President Biden on November 15th, 2021, with the objective of:

  • easing inflationary pressures and strengthening supply chains by making long overdue improvements to U.S.’s ports, airports, rail, and roads
  • expanding access to clean drinking water,
  • ensuring every American has access to high-speed internet,
  • tackling the climate crisis,
  • advancing environmental justice,
  • investing in communities that have too often been left behind,
  • driving the creation of good-paying union jobs and
  • growing the economy sustainably and equitably so that everyone gets ahead for decades to come.

U.S. Infrastructure Bill Spending Plans

U.S. Infrastructure Bill Spending Plans

As mentioned in the introduction, we had not seen much appreciation in the stock prices of its constituents until just this past week respective. Below is the performance of each constituent last week and YTD, in descending order. 

  1. Deere & Company (DE): +12.4% last week; (+3.9% YTD)
    • as a major producer of earthmoving and roadbuilding and forestry equipment DE should see an increased demand for its machinery.
  2. Freeport-McMoRan (FCX): +8.1%; (+31.4% YTD)
    • given that 43% of all copper mined is used in building construction, with another 20% used in transportation equipment, FCX should be a major benefactor.
  3. Crown Castle International (CCI): +6.9%; (-4.9% YTD)
    • as one of America's leading wireless tower real estate investment trusts (REITs), CCI should benefit from the expansion of mobile data usage.
  4. Nucor (NUE): +6.7%; (+17.9% YTD)
    • as the largest domestic steelmaker in North America, the pent-up demand from automakers and other industrial buyers should benefit NUE considerably going forward.
  5. ChargePoint Holdings (CHPT): +5.0%; (-44.7% YTD)
    • builds customized charging stations and the $7.5 billion in the bill will be enough to deliver about 250,000 new charging stations.
  6. Caterpillar (CAT): +4.6; (-7.9% YTD)
    •  as the manufacturer of asphalt pavers, compactors, excavators, pipe layers, backhoes CAT will benefit from future major infrastructure projects.
  7. United Rentals (URI): +0.6%; (-4.7% YTD)
    • rents out typical construction equipment and specialty equipment specifically designed for underground work and fluid treatment.
  8. Brookfield Infrastructure Corporation (BIPC): No Change; (+8.9% YTD)
    • with operations spanning utilities, transportation, energy, and even data infrastructure, BIPC should benefit enormously from business generated by the infrastructure bill.

The remaining 4 constituents, as described below, have not begun to advance in anticipation of benefiting from the passage of the Infrastructure Investment and Jobs Act but are expected to do so in the months - and years - to follow:

  1. Oshkosh Corp. (OSK): 
    • builds specialty trucks used in heavy construction projects as well as cement mixers, truck mounted cranes, "cherry pickers" and other hydraulic lifting systems and is well placed to meet the demand for the electrification of the federal vehicle fleet having recently won the contract to produce 165,000 new mail trucks.
  2. Vulcan Materials (VMC):
    • America's largest producer of construction aggregates such as crushed stone, sand and gravel, and a major producer of asphalt and cement VMC.
  3. Eaton Corp. (ETN): 
    • a major supplier of electrical components and systems which should benefit from the integration of wind and solar farms into the national grid.
  4. Martin Marietta Materials (MLM):
    • a producer of crushed sand and gravel products, ready-mixed concrete and asphalt, paving products and services, dolomitic lime for the steel and mining industries, and chemical products for use in flame retardants, wastewater treatment and assorted environmental applications.

On average, the  munKNEE Infrastructure Bill Beneficiaries Index went UP +2.5% last week but remains DOWN -2.5% YTD.

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