Experts warn that the infrastructure deficit in the U.S. is
stifling national competitiveness. At the same time, some of the
nations of Northern Europe and Asia have built better systems be
they, bullet trains, super highways or airports. China continues
to build world class infrastructure that supports its chosen role
as the manufacturing hub of the world.
American transport infrastructure was highly regarded just a
decade ago but today the World Economic Forum does not place it
among the top 20 nations. In fact, the American Society of Civil
Engineers reportedly does not even give the nation's
infrastructure facilities a passing grade. While it is true that
the U.S. may not have adequately invested in traditional
facilities (such as roads, railways and airports), the super
highways of the future are less likely to be built of asphalt and
concrete and more likely to be in speed of computation and
The passage of the Federal highway bill (aka
Moving Ahead for Progress in the 21st Century
) last summer is expected to provide a major fillip to transport
infrastructure. MAP-21 legislation provides substantial funds to
guide the development and growth of the nation's transport
infrastructure. The future looks promising for infrastructure
given the bi-partisan discourse on the issue unlike divisive
topics such as immigration or the budget. Here we take a look at
a few companies which may benefit from the spotlight on
The Industrial & Infrastructure segment (about 41.5% of
company-wide sales) of
) provides design, engineering, procurement and construction
services, with respect to both new construction and
refurbishment, in transportation and other sectors.
We believe that private-public partnerships will be critical
for meeting funding requirements in transportation. One such
recent example is the Fluor, Virginia Department of
Transportation and Transurban tripartite effort which achieved
major completion, in November 2012, of the I-495 Express Lanes in
N. Virginia. Such cases demonstrate that Fluor holds a leadership
position in private delivery of public infrastructure projects.
Incidentally, Fluor is celebrating its centenary in 2012.
Jacobs Engineering Group Inc.
) is one the largest providers of professional, technical and
construction services. The company collaborates with state level
departments of transportation to manage transport projects, such
as its three year contract with the Washington State Department
of Transportation to provide operational and engineering support
to WSDOT's rail enhancement program.
A comprehensive road building program may not be complete
Astec Industries, Inc.
), America's number one maker of equipment for asphalt road
laying. The company sells equipment used in each phase of road
building, from quarrying and crushing the aggregate to applying
the asphalt. Its clients include asphalt road making contractors
and it serves government agencies.
Astec's customers depend on government funding for the
construction and maintenance of the infrastructural projects. The
company sees a window of opportunity as the economy recuperates
and the burst of demand for gear will have to be acquired.
), with cement operations based in Texas, is strongly placed in
the key domestic markets of California and Texas. The company
recently reported bullish trends with firmer cement pricing and
rising shipments. Texas Industries' stock is up about 65% year to
date compared with a 13.4% return from the S&P 500. Other key
cement producers show a similar run up in their stock
), with interests ranging from housing to infrastructure, lowered
its sales guidance for 2012 to $66 billion and its EPS
expectation to between $9.00 and $9.25, citing weaker economic
conditions across most parts of the globe. Nonetheless, this
guidance, if realized, would mark the highest revenues and profit
in Caterpillar's history, even ahead of last year's
In summation, America's decrepit infrastructure, blamed for
everything from delays to fatalities, must be rejuvenated as a
part of a national renewal. Yet, at least at the bourses at this
time, there may be relatively few winners in this space outside
the cement sector.
ASTEC INDS INC (ASTE): Free Stock Analysis
CATERPILLAR INC (CAT): Free Stock Analysis
FLUOR CORP-NEW (FLR): Free Stock Analysis
JACOBS ENGIN GR (JEC): Free Stock Analysis
TEXAS INDS (TXI): Free Stock Analysis Report
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