(C) Reuters. 2 Infrastructure Stocks to Buy in July, 2 to Avoid
With President Biden having purportedly reached an agreement with a bipartisan group of senators on an infrastructure bill, and with the economy’s reopening driving the infrastructure sector’s revival, we believe it is wise to invest in fundamentally strong stocks in the sector Eaton (NYSE:ETN) and Oshkosh (NYSE:OSK). Conversely, investors should avoid Vulcan (VMC) and Martin Marietta Materials (NYSE:MLM), which are trading at sky-high valuations that we don’t think are justified by their near-term growth prospects. Let’s examine these names.Because traditional infrastructure like roads, bridges and ports need regular maintenance and upgrades, it’s no surprise that the infrastructure sector has been enjoying renewed investor attention with the economy’s reopening. This is evidenced by the Global X U.S. Infrastructure Development ETF’s (PAVE) and iShares U.S. Infrastructure ETF’s (IFRA) 21.4% and 17.7% respective returns year-to-date.
Furthermore, because President Biden recently reached an agreement with a bipartisan group of senators on a $1.2 trillion infrastructure plan, the industry is expected to be the recipient of even more investor attention this month and beyond. However, not all stocks in the infrastructure space are solid bets currently.
Eaton Corporation plc (ETN) and Oshkosh Corporation (OSK) are two fundamentally sound stocks in the infrastructure space that we think have the potential to capitalize on the industry tailwinds. So, it could be wise to bet on them now. Conversely, we believe investors should steer clear of the stocks of Vulcan Materials Company (NYSE:VMC) and Martin Marietta Materials, Inc. (MLM) given their lofty valuations, which look untenable considering the company’s bleak near-term growth prospects.
2 Infrastructure Stocks to Buy in July, 2 to Avoid
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.