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Four Construction Equipment Infrastructure Stocks to Buy Rev up Growth Engines

Four construction equipment infrastructure stocks to buy rev up growth engines for investors who expect government spending on public projects to receive a boost. The four construction equipment infrastructure stocks to buy feature both sellers and lessor

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Four construction equipment infrastructure stocks to buy rev up growth engines for investors who expect government spending on public projects to receive a boost.

The four construction equipment infrastructure stocks to buy feature both sellers and lessors of big machinery needed to build roads, bridges and power generation projects, as well as assist in agricultural and forestry initiatives. The Democrat-led U.S. House of Representatives, in a 220-212 vote on Aug. 24, approved a $3.5 trillion budget bill and locked in a vote by Sept. 27 on a Senate-passed $1.1 trillion infrastructure bill, halting an open dispute about the Democrats’ political agenda between 10 centrist lawmakers and House Speaker Nancy Pelosi, among other party leaders.

Construction equipment stocks should benefit from the infrastructure bill, which includes $550 billion of increased funding for roads, bridges, expanded broadband and water system upgrades around the country to avoid the lead-leaching pipes that led to illness and deaths in my hometown of Flint, Michigan. That legislation also would reauthorize existing federal infrastructure programs.

‘Mr. Wonderful,’ Shark Tank’s Kevin O’Leary, Predicts Passage of Legislation

“One way or another, infrastructure spending increases will pass because it has political support from both sides of the political aisle,” said Kevin O’Leary, chairman of Boston-based O’Shares ETFs.

“This kind of infrastructure spending hasn’t really happened in the U.S. since the ‘50s,” O’Leary said.

Plus, broadband has become important to support the new digital economy that has “emerged out of the pandemic,” O’Leary said. Broadband became a key part of the infrastructure bill to help bring internet access to rural and other underserved areas.

Passage of the legislation will supply liquidity to the market, and many companies that provide infrastructure goods and services will benefit, O’Leary said.

Paul Dykewicz interviews Kevin O’Leary, chairman of O’Shares ETFs.

Four Construction Equipment Infrastructure Stocks to Buy Can Be a Good Inflation Hedge

The federal budget and infrastructure legislation moving through Congress helps construction equipment companies and stocks, said Bob Carlson, chairman of the Board of Trustees of Virginia’s Fairfax County Employees’ Retirement System with more than $4 billion in assets. Infrastructure stocks have been recommended by Carlson during the past last few years, even before the legislation, due to the strong need for upgrading or replacing crumbling roads and bridges in the United States and elsewhere, he added. 

Infrastructure stocks can be a good inflation hedge, said Carlson, who also heads the Retirement Watch investment newsletter.

Pension fund and Retirement Watch chief Bob Carlson answers questions from columnist Paul Dykewicz.

Investors who like infrastructure stocks as an inflation hedge can consider DWS RREEF Real Assets (AAASX), Carlson told me. The fund is actively managed and invests in infrastructure stocks, real estate investment trusts, Treasury Inflation-Protected Securities (TIPS), gold and most commodities, he added. 

“The managers adjust their allocations to the different asset classes based on their view of where the economy is in its cycle,” Carlson continued. “They have a solid record of making timely changes and also making a good selection within each asset class.”

The fund is up 16.35% so far in 2021 and 26.36% during the past 12 months.

Four Construction Equipment Infrastructure Stocks to Buy Feature Caterpillar

Caterpillar Inc. (NYSE:CAT), a Deerfield, Illinois-based American Fortune 100 company that is the world’s largest construction-equipment manufacturer. designs, develops, engineers, manufactures, markets and sells machinery, engines, financial products and insurance to customers via its worldwide dealer network. The established company is not growing lightning fast, but it is far from fizzling out either.

BoA Global Research assigned a $223 price objective to CAT, based on 19x 2022 estimated earnings per share (EPS), topping the stock’s long-term historical range of 16-17x, due to the current low interest rate environment, above average market price-to-earnings (P/E) multiple and early stage of the construction cycle. While end-user dealer sales are stabilizing and poised to recover, the trajectory could be constrained as mining and oil & gas customers continue to favor shareholder returns rather than capital spending, BoA wrote in a recent research note.

Chart courtesy of www.StockCharts.com

Potential risks that could prevent Caterpillar from reaching the BoA price objective are a widening global coronavirus pandemic that might tilt the global economy into recession; a greater-than-expected reduction or delay in capital spending among large mining and oil and gas customers; intensifying pricing pressure in the construction and mining equipment industries; and legal risks due to current regulatory probes. Another possible problem could be any sustained deterioration of dealer sales growth.

On the other hand, possible reasons BoA gave for Caterpillar to surpass expectations include a faster-than-expected recovery in the global economy; a firming earthmoving construction equipment market; limited oil & gas contagion risk from electric power, construction and marine markets; continuing recovery in commodity prices; and stronger-than-expected demand trends in gas compression. Yet another factor could be quicker-than-expected resolution to the pandemic.

Four Construction Equipment Infrastructure Stocks to Buy Include Two Picks from Market Veteran

Although BoA currently shows a “neutral” rating for Caterpillar, seasoned stock picker Jim Woods lists it as a “buy” for his Intelligence Report readers.

Paul Dykewicz meets with investing veteran Jim Woods, who heads Bullseye Stock Trader.

“The economic reopening trade, also known as the reflation trade, has been felt most in cyclical and value stocks, and particularly in bellwether industrial companies,” said Jim Woods, editor of the Successful Investing and Intelligence Report, as well as the leader of the Bullseye Stock Trader advisory service. “Two of the best-run, and best-positioned industrials are Caterpillar (CAT) and Cummins Inc. (CMI). Both have strong earnings growth, yet both stocks have seen some selling since June. For long-term investors, this recent pullback represents a good buying opportunity in two stalwart dividend stocks.”

Cummins Gains Place Among Four Construction Equipment Infrastructure Stocks to Buy

Cummins Inc. (NYSE:CMI), of Columbus, Indiana, designs, manufactures, and distributes engines, filtration and power generation products. BoA has given Cummins a “buy” recommendation and a 12-month price objective of $325, based on 14.3x 2022 estimated EPS and an assumed $3.6 billion valuation for its New Power segment.

Historically, Cummins has traded at a low- to mid-teens P/E. While some observers view BoA’s $20 EPS forecast as a peak, the investment firm wrote a recent research note predicting Cummins would rise above $20 of EPS through the next cycle when the current one eventually bottoms somewhere in the 2024 timeframe.

Chart courtesy of www.StockCharts.com

Potential risks that could stop Cummins from achieving BoA’s price objective include a disorderly spike in interest rates leading to aggressive Fed policy tightening; a hard landing for the China or North American heavy-duty truck market; and faster-than-expected full battery electric vehicle (BEV) penetration without a commensurate number of offsetting wins from Cummins.

Catalysts for the stock could come from a sustained recovery in the North American heavy duty truck cycle; positive developments in the Cummins hydrogen efforts; stronger-than-expected resilience in China’s truck market; democratic government drive for new emission regulation; and a large, accretive acquisition.

Deere Gains Spot Among Four Construction Equipment Infrastructure Stocks to Buy

Deere & Co. (NYSE:DE), of Moline, Illinois, is a manufacturer of agricultural, construction and forestry machinery, along with diesel engines, drivetrains used in heavy equipment, as well as lawn care equipment. The company received a “buy” recommendation from BoA, along with a $425 price objective, based on 20x the equipment company’s fiscal year 2022 estimated earnings per share forecast. 

BoA’s target 20x price-to-earnings multiple is at a 12% premium to the average P/E during the last five and 20 years of 18x P/E. However, BoA called it justified, since Deere may be the highest quality large-cap machinery stock with both cyclical and structural tailwinds due to its position as the industry innovator in precision agriculture.

Chart courtesy of www.StockCharts.com

Potential risks to the price objective and “buy” rating that BoA assigned to Deere are the widening coronavirus pandemic that weighs on the global economy and if the used equipment market takes a downturn and causes large residual value impairments. Other possible risks include any reversal in the extended improvement in commodity prices, as well setbacks in construction equipment coming out of Europe, where Deere has been trying to integrate the operations of Wirtgen Group, formerly a privately held international construction machinery company.

Four Construction Equipment Infrastructure Stocks to Buy Include Equipment Rental Company

Bonita Springs, Florida-based Herc Holdings Inc (NYSE:HRI) is one of the largest equipment rental companies in North America. Herc Holdings generated total revenues of nearly $1.8 billion in 2020 by offering its customers a diversified fleet of equipment valued at $3.6 billion through approximately 277 locations, primarily in North America.

BoA’s price objective for Herc is $160 per share, or 6.5x 2022 estimated enterprise value/EBITDA. The investment firm’s 6.5x target multiple is about one turn above the mid-point of the historical 5-6x EBITDA multiple range, which Boa wrote seems justified given the improvement in performance through the cycle versus historical comparisons. At $160 per share, the stock would still only be trading at a 50% premium to replacement cost, above the historical average of trading at or just below replacement, BoA wrote.

Chart courtesy of www.StockCharts.com

Potential risks that BoA cautioned could cause Herc to fall short of reaching the investment firm’s price objective include a double dip recession; a disorderly spike in interest rates, renewed weakness in the energy markets; slower-than-expected recovery in rental rates; and turmoil in the debt markets. Possible catalysts that could boost the stock beyond BoA’s share price estimates could come from a sharper-than-expected economic recovery or bounce in oil prices, or that the company is eventually bought as the U.S. equipment rental market consolidates

COVID-19 Adds Risk to Four Construction Equipment Infrastructure Stocks to Buy

The highly transmissible Delta variant of COVID-19 has raised concerns among health experts about a surge in virus cases and deaths across the United States. The Centers for Disease Control and Prevention (CDC) is blaming the Delta variant for the spikes in case numbers and deaths.

However, the variant is leading to an increase in the number of people vaccinated from COVID-19. As of Aug. 24, 202,041,893 people, or 60.9% of the U.S. population, have received at least one dose of a COVID-19 vaccine. The fully vaccinated consisted of 171,367,657 people, or 51.6%, of the U.S. population, according to the CDC.

COVID-19 cases worldwide, as of Aug. 24, totaled 213,098,413 and led to 4,450,408 deaths, according to Johns Hopkins University. U.S. COVID-19 cases reached 38,053,653 and caused 630,663 deaths. America has the dreaded distinction as the country with the most COVID-19 cases and deaths.

The four construction equipment infrastructure stocks to buy are worth considering by investors who seek profits from growing government spending on roads, bridges and other public projects. Increased federal spending on such projects seems destined to become law and the four construction equipment infrastructure stocks to buy should be fueled by the funding.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of  StockInvestor.com and DividendInvestor.com,  a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for special pricing!

The post Four Construction Equipment Infrastructure Stocks to Buy Rev up Growth Engines appeared first on Stock Investor.

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There will soon be one million seats on this popular Amtrak route

“More people are taking the train than ever before,” says Amtrak’s Executive Vice President.

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March 11, 2024

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While the size of the United States makes it hard for it to compete with the inter-city train access available in places like Japan and many European countries, Amtrak trains are a very popular transportation option in certain pockets of the country — so much so that the country’s national railway company is expanding its Northeast Corridor by more than one million seats.

Related: This is what it's like to take a 19-hour train from New York to Chicago

Running from Boston all the way south to Washington, D.C., the route is one of the most popular as it passes through the most densely populated part of the country and serves as a commuter train for those who need to go between East Coast cities such as New York and Philadelphia for business.

Veronika Bondarenko captured this photo of New York’s Moynihan Train Hall. 

Veronika Bondarenko

Amtrak launches new routes, promises travelers ‘additional travel options’

Earlier this month, Amtrak announced that it was adding four additional Northeastern routes to its schedule — two more routes between New York’s Penn Station and Union Station in Washington, D.C. on the weekend, a new early-morning weekday route between New York and Philadelphia’s William H. Gray III 30th Street Station and a weekend route between Philadelphia and Boston’s South Station.

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According to Amtrak, these additions will increase Northeast Corridor’s service by 20% on the weekdays and 10% on the weekends for a total of one million additional seats when counted by how many will ride the corridor over the year.

“More people are taking the train than ever before and we’re proud to offer our customers additional travel options when they ride with us on the Northeast Regional,” Amtrak Executive Vice President and Chief Commercial Officer Eliot Hamlisch said in a statement on the new routes. “The Northeast Regional gets you where you want to go comfortably, conveniently and sustainably as you breeze past traffic on I-95 for a more enjoyable travel experience.”

Here are some of the other Amtrak changes you can expect to see

Amtrak also said that, in the 2023 financial year, the Northeast Corridor had nearly 9.2 million riders — 8% more than it had pre-pandemic and a 29% increase from 2022. The higher demand, particularly during both off-peak hours and the time when many business travelers use to get to work, is pushing Amtrak to invest into this corridor in particular.

To reach more customers, Amtrak has also made several changes to both its routes and pricing system. In the fall of 2023, it introduced a type of new “Night Owl Fare” — if traveling during very late or very early hours, one can go between cities like New York and Philadelphia or Philadelphia and Washington. D.C. for $5 to $15.

As travel on the same routes during peak hours can reach as much as $300, this was a deliberate move to reach those who have the flexibility of time and might have otherwise preferred more affordable methods of transportation such as the bus. After seeing strong uptake, Amtrak added this type of fare to more Boston routes.

The largest distances, such as the ones between Boston and New York or New York and Washington, are available at the lowest rate for $20.

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The next pandemic? It’s already here for Earth’s wildlife

Bird flu is decimating species already threatened by climate change and habitat loss.

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1 hour ago

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March 11, 2024

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I am a conservation biologist who studies emerging infectious diseases. When people ask me what I think the next pandemic will be I often say that we are in the midst of one – it’s just afflicting a great many species more than ours.

I am referring to the highly pathogenic strain of avian influenza H5N1 (HPAI H5N1), otherwise known as bird flu, which has killed millions of birds and unknown numbers of mammals, particularly during the past three years.

This is the strain that emerged in domestic geese in China in 1997 and quickly jumped to humans in south-east Asia with a mortality rate of around 40-50%. My research group encountered the virus when it killed a mammal, an endangered Owston’s palm civet, in a captive breeding programme in Cuc Phuong National Park Vietnam in 2005.

How these animals caught bird flu was never confirmed. Their diet is mainly earthworms, so they had not been infected by eating diseased poultry like many captive tigers in the region.

This discovery prompted us to collate all confirmed reports of fatal infection with bird flu to assess just how broad a threat to wildlife this virus might pose.

This is how a newly discovered virus in Chinese poultry came to threaten so much of the world’s biodiversity.

H5N1 originated on a Chinese poultry farm in 1997. ChameleonsEye/Shutterstock

The first signs

Until December 2005, most confirmed infections had been found in a few zoos and rescue centres in Thailand and Cambodia. Our analysis in 2006 showed that nearly half (48%) of all the different groups of birds (known to taxonomists as “orders”) contained a species in which a fatal infection of bird flu had been reported. These 13 orders comprised 84% of all bird species.

We reasoned 20 years ago that the strains of H5N1 circulating were probably highly pathogenic to all bird orders. We also showed that the list of confirmed infected species included those that were globally threatened and that important habitats, such as Vietnam’s Mekong delta, lay close to reported poultry outbreaks.

Mammals known to be susceptible to bird flu during the early 2000s included primates, rodents, pigs and rabbits. Large carnivores such as Bengal tigers and clouded leopards were reported to have been killed, as well as domestic cats.

Our 2006 paper showed the ease with which this virus crossed species barriers and suggested it might one day produce a pandemic-scale threat to global biodiversity.

Unfortunately, our warnings were correct.

A roving sickness

Two decades on, bird flu is killing species from the high Arctic to mainland Antarctica.

In the past couple of years, bird flu has spread rapidly across Europe and infiltrated North and South America, killing millions of poultry and a variety of bird and mammal species. A recent paper found that 26 countries have reported at least 48 mammal species that have died from the virus since 2020, when the latest increase in reported infections started.

Not even the ocean is safe. Since 2020, 13 species of aquatic mammal have succumbed, including American sea lions, porpoises and dolphins, often dying in their thousands in South America. A wide range of scavenging and predatory mammals that live on land are now also confirmed to be susceptible, including mountain lions, lynx, brown, black and polar bears.

The UK alone has lost over 75% of its great skuas and seen a 25% decline in northern gannets. Recent declines in sandwich terns (35%) and common terns (42%) were also largely driven by the virus.

Scientists haven’t managed to completely sequence the virus in all affected species. Research and continuous surveillance could tell us how adaptable it ultimately becomes, and whether it can jump to even more species. We know it can already infect humans – one or more genetic mutations may make it more infectious.

At the crossroads

Between January 1 2003 and December 21 2023, 882 cases of human infection with the H5N1 virus were reported from 23 countries, of which 461 (52%) were fatal.

Of these fatal cases, more than half were in Vietnam, China, Cambodia and Laos. Poultry-to-human infections were first recorded in Cambodia in December 2003. Intermittent cases were reported until 2014, followed by a gap until 2023, yielding 41 deaths from 64 cases. The subtype of H5N1 virus responsible has been detected in poultry in Cambodia since 2014. In the early 2000s, the H5N1 virus circulating had a high human mortality rate, so it is worrying that we are now starting to see people dying after contact with poultry again.

It’s not just H5 subtypes of bird flu that concern humans. The H10N1 virus was originally isolated from wild birds in South Korea, but has also been reported in samples from China and Mongolia.

Recent research found that these particular virus subtypes may be able to jump to humans after they were found to be pathogenic in laboratory mice and ferrets. The first person who was confirmed to be infected with H10N5 died in China on January 27 2024, but this patient was also suffering from seasonal flu (H3N2). They had been exposed to live poultry which also tested positive for H10N5.

Species already threatened with extinction are among those which have died due to bird flu in the past three years. The first deaths from the virus in mainland Antarctica have just been confirmed in skuas, highlighting a looming threat to penguin colonies whose eggs and chicks skuas prey on. Humboldt penguins have already been killed by the virus in Chile.

A colony of king penguins.
Remote penguin colonies are already threatened by climate change. AndreAnita/Shutterstock

How can we stem this tsunami of H5N1 and other avian influenzas? Completely overhaul poultry production on a global scale. Make farms self-sufficient in rearing eggs and chicks instead of exporting them internationally. The trend towards megafarms containing over a million birds must be stopped in its tracks.

To prevent the worst outcomes for this virus, we must revisit its primary source: the incubator of intensive poultry farms.

Diana Bell does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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This is the biggest money mistake you’re making during travel

A retail expert talks of some common money mistakes travelers make on their trips.

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March 11, 2024

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Travel is expensive. Despite the explosion of travel demand in the two years since the world opened up from the pandemic, survey after survey shows that financial reasons are the biggest factor keeping some from taking their desired trips.

Airfare, accommodation as well as food and entertainment during the trip have all outpaced inflation over the last four years.

Related: This is why we're still spending an insane amount of money on travel

But while there are multiple tricks and “travel hacks” for finding cheaper plane tickets and accommodation, the biggest financial mistake that leads to blown travel budgets is much smaller and more insidious.

A traveler watches a plane takeoff at an airport gate.

Jeshoots on Unsplash

This is what you should (and shouldn’t) spend your money on while abroad

“When it comes to traveling, it's hard to resist buying items so you can have a piece of that memory at home,” Kristen Gall, a retail expert who heads the financial planning section at points-back platform Rakuten, told Travel + Leisure in an interview. “However, it's important to remember that you don't need every souvenir that catches your eye.”

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According to Gall, souvenirs not only have a tendency to add up in price but also weight which can in turn require one to pay for extra weight or even another suitcase at the airport — over the last two months, airlines like Delta  (DAL) , American Airlines  (AAL)  and JetBlue Airways  (JBLU)  have all followed each other in increasing baggage prices to in some cases as much as $60 for a first bag and $100 for a second one.

While such extras may not seem like a lot compared to the thousands one might have spent on the hotel and ticket, they all have what is sometimes known as a “coffee” or “takeout effect” in which small expenses can lead one to overspend by a large amount.

‘Save up for one special thing rather than a bunch of trinkets…’

“When traveling abroad, I recommend only purchasing items that you can't get back at home, or that are small enough to not impact your luggage weight,” Gall said. “If you’re set on bringing home a souvenir, save up for one special thing, rather than wasting your money on a bunch of trinkets you may not think twice about once you return home.”

Along with the immediate costs, there is also the risk of purchasing things that go to waste when returning home from an international vacation. Alcohol is subject to airlines’ liquid rules while certain types of foods, particularly meat and other animal products, can be confiscated by customs. 

While one incident of losing an expensive bottle of liquor or cheese brought back from a country like France will often make travelers forever careful, those who travel internationally less frequently will often be unaware of specific rules and be forced to part with something they spent money on at the airport.

“It's important to keep in mind that you're going to have to travel back with everything you purchased,” Gall continued. “[…] Be careful when buying food or wine, as it may not make it through customs. Foods like chocolate are typically fine, but items like meat and produce are likely prohibited to come back into the country.

Related: Veteran fund manager picks favorite stocks for 2024

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