Infrastructure Stocks Rebound

Trend: Government spending on infrastructure in 2009 will boost the stock price of companies that win contracts. 

House Majority Leader Steny Hoyer, the second-highest ranking member in the House, said the government is going to put money in infrastructure projects to spur spending and create jobs.

Nick Hodge at Wealth Daily recommends several infrastructure stocks that may have hit bottom. Excerpts below.

Link: Infrastructure Stocks

To get an idea of how to capitalize on this opportunity, you first must know what is included under the broad umbrella of 'infrastructure stocks.' I'd put the following sectors in that category:

• construction and engineering firms

• suppliers of concrete, steel, heavy equipment

• water infrastructure companies

• transmission companies/electric utilities and

• green infrastructure companies

I'd be looking for companies that dabble in more than one of those sectors, and have a successful track record of doing so.

Here's a list of the infrastructure stocks that I like, and that have sold-off dramatically over the past few months:

• ABB Ltd. (NYSE: ABB)

• Fluor (NYSE: FLR)

• Jacobs Engineering (NYSE: JEC)

• American Superconductor (NASDAQ: AMSC)

• Foster Wheeler (NASDAQ: FWLT)

• The Shaw Group (NYSE: SGR)

I don't think it's a coincidence they started to rise shortly after the election, and upon talks of a second stimulus that will include infrastructure spending.

Now's the time to get in, before they head back to the levels of earlier this year.

And if it's not individual companies you're after, here's a list of infrastructure ETFs and mutual funds:

• Kensington Global Infrastructure (NASDAQ: KGIAX)

• Kinetics Water Infrastructure (NASDAQ: KWINX)

• iShares S&P Global Infrastructure Fund (NYSE: IGF)

• First Trust ISE Global Engineering & Construction (NYSE: FLM)

• SPDR FTSE/Macquarie Global Infrastructure 100 ETF (NYSE: GII)

Consider this: a 2005 study by the American Society for Civil Engineers (ASCE) concluded with a report card for all the U.S.'s infrastructure systems.

On a cumulative basis, America's infrastructure G.P.A was a D.

The conclusion?

ASCE estimates that $1.6 trillion is needed over a five-year period to bring the nation's infrastructure to a good condition. Establishing a long-term development and maintenance plan must become a national priority. But in the short term, small steps can be taken by the 110th Congress, as well as state legislatures and local communities, to improve our nation's failing infrastructure.

So getting in some solid infrastructure stocks can now could provide a short-term boost with even better long-term prospects.