"The new administration will likely soon launch a new spending program to put people back to work and boost the economy," says Jim Powell, adding, "That's even more likely now that the financial crisis is in full swing and growth is declining."
In his Global Changes & Opportunities Report he looks at General Cable (NYSE: BGC) as a play on the rebuilding of the nation's electric power grid.
"Politicians at all levels have also voiced strong support for rebuilding our woefully inadequate infrastructure. Because building roads, bridges, electrical grids, and so on, will employ many voters, I think allocations for such projects will go to the top of the government's spending list.
"That's especially true since infrastructure projects will also funnel billions of dollars to state and local governments that are facing hard times. All in all, modernizing the the electric power grid should be another very pro?table long-term investment.
"I believe the most promising beneficiary of the electric power project will be General Cable. The company produces products for a wide variety of applications including large cables for long distribution networks.
"As the U.S. electrical grid is upgraded and expanded, General Cable should get the lion's share of new orders for high-voltage lines, feeder connections, and underground links.
"General Cable will also profit from the worldwide power plant building boom that's getting started. U.S electrical companies alone plan to increase their cold-fired capacity by 30% over the next five to eight years.
"No numbers are available for electric plants powered by natural gas or nuclear energy, but they will be even more expensive. General Cable is a specialist in providing products for the internal systems used by all power plants.
"General Cable also makes products for other applications including factories, chemical plants, offshore drilling rigs, ships, industrial and of?ce parks, and other large installations. Smaller wires and cables are made for automobiles, instruments, military vehicles, and similar products.
"In addition to electrical products, the company produces fiber optic lines for computer and telecommunication links. Although this area has been in the doldrums since the telecom bust in 2000/01, the market is coming back to life as the demand for broadband links continues to expand.
"General Cable has also been battered by the stock market collapse. Its price is down 74.4% from its January high, which is way out of proportion to its earnings decline from $1.11 to $1.07. However, that's what often happens during panics, and is why oversold stocks can be so pro? table in long-term accounts."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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