"Granite Construction (NYSE: GVA) is a play on President-elect Barack Obama’s plans to plow vast amounts of money into infrastructure," notes contrarian Todd Salomone.
In Schaeffer’s Investment Research, the analyst explains, "Granite Construction -- my top pick for 2009 -- provides civil construction services, including projects designed to improve streets, roads, highways and bridges."
"Investing in infrastructure is one of Obama's solutions to address a deteriorating economy. There is $64 billion in 'ready-to-go' projects, of which GVA should be a beneficiary.
"The shares Granite Consruction have performed admirably in 2008 amid an extremely weak broad market. For example, through mid-December, GVA shares were up 24% as the broader S&P 500 Index was down 38%.
"In November 2008, the equity climbed above the 40 area, which has capped the shares' rally attempts during the previous 12 months.
"For chart watchers, a concern would be the 48 area, which would mark a 50-% retracement of the August 2007 high and the October 2008 low. Such retracement areas can sometimes act as technical resistance for a stock.
"Most intriguing is that despite GVA's positive price action and strong fundamental prospects for 2009, many investors are still not on board, suggesting sideline cash or short covering could keep the rally intact.
"Short interest on GVA stands at 17% of the company's float, after a 24% increase in short positions during the month of November.
"Moreover, there is tremendous upgrade potential for GVA. According to Zacks, there is only one analyst 'buy' rating on GVA, while five Street analysts tag the shares with a 'hold.'”
