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Infrastructure X-Factor: Top Picks for the Road Ahead

by | Nov 12, 2021 | Stocks

After months of debate, Congress finally got the votes it needed to pass its $1.2 trillion infrastructure bill.

Over the next several years, the infrastructure bill will push tax dollars toward improvement projects for roads, bridges, railways and airports across the United States needing an infusion of new cash investments.

The legislation has also slated $73 billion of funding to help revamp the power grid, including thousands of miles of transmission lines, new power stations and expansion of clean and renewable energy.

The news is already lifting clean energy and EV related names in the short term like FuelCell Energy Inc. (Nasdaq: FCEL) and Plug Power Inc. (Nasdaq: PLUG).

But this is a trend that will continue to charge long-term gains…

So let’s look at some of the areas of the market set to benefit from the infrastructure bill’s cash infusion…

Top Stocks Benefitting from the Infrastructure Bill’s Cash Infusion

Reshaping America’s power demand is the largest public infrastructure undertaking in decades, and in order to replace and futureproof, the bill will infuse cash into all of the technology and resources needed to build it.

That means more of everything: concrete, steel, aluminum, heavy machinery, microchips, batteries… you get the picture.

The final version of the bill includes about $300 billion to fund existing and new highway projects. The American Iron and Steel Institute estimates that every $1 billion in spending will require 50,000 tons of steel.

By that guideline, we’re looking at demand for an additional 15 million tons of steel on the highway side alone. For some perspective, the United States used about 112 million tons of the sturdy metal in 2018.

Big steel names like Nucor Corporation (NYSE: NUE), Steel Dynamics Inc. (Nasdaq: STLD) and a good friend I call “Letter X” — aka, U.S. Steel (NYSE: X) — are likely to benefit significantly once those projects hit their books.

Of the three, U.S. Steel is undergoing a transition in how it makes its metal away from the old, slow, labor-intensive blast furnaces that can take days to heat up and cool down. These days, more steel producers are recyclers that use more efficient electric arc furnaces.

That will help streamline costs for the company and make them better able to respond to demand volatility for years to come.

Nearer term, the Blitz Tracker is picking up massive call buying in U.S. Steel — traders snapped up around 9,000 contracts of the January 21, 2022 $30 calls Thursday for more than $900,000 in premium!

With the infrastructure bill’s infusion of hundreds of billions of cash heading into the markets in the coming years, steel is just one of the sectors ready for a cash injection.

In fact, I have a new report on my No. 1 pick waiting to get ahold of the $7.5 billion in EV infrastructure tailwind headed its way — and it’s available over at Sweet Spot Stocks right now!

Check out the video below to find out my thoughts on the stocks and sectors in line to get an infusion of cash from the infrastructure bill and more…

WRITTEN BY<br>Lance Ippolito

Lance Ippolito

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