"President Obama's proposed rebuilding plans are great news for steel and other industrial metals makers," says resource sector specialist Larry Edelson, who recommends a pair of beneficiaries: U.S. Steel Corp. (NYSE: X) and Alcoa (NYSE: AA).
The editor of Real Wealth newsletter explains, "Obama has pledged to give the U.S. economy a massive shot in the arm with the biggest public works spending package this nation has seen in more than 50 years.
"Besides spending on road, bridge, school improvements and construction, the plan is likely to include upgrading our deteriorating electrical grid and greater investments in public transportation, among other infrastructure projects. The plan is also expected to create about 2.5 million jobs.
"While steel and other base metal prices have tanked sharply this year on slumping global demand, companies that produce the metals have staged some massive cutbacks in production and many have shuttered large chunks of their operations.
"These supply cuts are more than likely to exceed the buildup in demand that will inevitably happen due to the massive infrastructure spending plan and the eventual asset reinflation of the financial system.
"Pennsylvania-based U.S. Steel and New York-based Alcoa are trading at multi-year lows. Both stocks have extremely attractive P/Es and both are likely to have bottomed or are darned close to it. Both stock get my vote.
"U.S. Steel is the largest steelmaker in the United States. While the company recently announced plans to idle three plants, U.S. Steel stands to rake in some serious profits from any plan to rebuild the nation's infrastructure.
"The $4 billion-company's share price is trading about 82% below the 52-week high, and its P/E ratio of 2.35 makes it a steal!
"Alcoa also stands to make some serious profits from the U.S. public works spending package. The company's shares are selling nearly 80% below their 52-week high, and a P/E of 4.70 makes it an attractive buy."
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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