Investors Business Daily: Obama Says 'Yes We Can Build' Infrastructure
By:
TraderMark Wednesday, December 10, 2008 4:41 PM
One thing about being ahead of the curve is you do not realize that patience is rewarded as the herd catches up. Again, I am completely boggled that this infrastructure "story" was "news" to everyone but apparently we can see why newspapers are dying a slow death - no one reads... scratching my head still since it was so obvious.
Investors Business Daily chimes in on the man with the golden touch....
- While the massive economic stimulus plan proposed by President-elect Obama should be a boon to engineering and construction stocks, how big of a boon won't be known until more details are trotted out -- or, for that matter, any details. (details, schmetails - we have a thesis! that's all that matters in the casino) That uncertainty hasn't prevented Wall Street from hitching its wagon to E&C firms as investors look for potential bright spots wherever they can find them. (boo yah)
- Obama sparked a huge rally in the sector following his Sunday appearance on NBC's "Meet the Press," where he hinted at the largest U.S. public works spending program since the interstate highway system was established in the 1950s. (although he has said as much for 2 months... )A day later, the 25 stocks in IBD's heavy construction group rose more than 11%. They spent much of Tuesday pushing higher before finishing lower amid a broader market sell-off. The group is up 59% since hitting a 31/2-year closing low on Nov. 20.
- Engineering and construction firms should reap many of the early rewards amid a government-led effort to create jobs and invigorate the economy by improving the nation's roads, bridges, schools and public buildings.
- "Obama has made it clear he's going to spend considerable sums building up infrastructure, so that obviously plays into the strengths of companies like Fluor (NYSE:FLR - News), Jacobs (Engineering) (NYSE:JEC - News) and Caterpillar (NYSE:CAT - News)," said Dan Greenhaus, senior analyst in the Equity Strategy Group at Miller Tabak.
- Gains have also occurred at international firms such as Japan's Komatsu, the world's No. 2 maker of construction machinery; and Tata Motors, India's top truck maker.
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