Granite Construction Is Positioned For U.S. Infrastructure Rebuilding

Summary

• The weak US economy and the high unemployment rate should set the stage for an infrastructure rebuilding program.
• Bipartisan support for a long-overdue project.
• GVA is an infrastructure contractor in the US.
• The stock is significantly below its 2018 peak.
• How GVA stacks up against competitors - levels to watch in the stock.
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Finding value in the stock market is more than a challenge these days. Since March, all of the leading indexes have risen to record highs. The technology stocks have done the best as the pandemic hastened the decline of retail businesses. Social distancing and working and sheltering at home have increased the demand for technological solutions for communications, shopping, and many other aspects of daily life. COVID-19 has ushered in a new era for technology, and companies are cashing in on the trend.

Many people who shunned technology in the past are now embracing it as they have little choice. Educating consumers in 2020 will alter behavior in the coming years as the world has become far more tech-savvy. Technology was the best place to be in 2020, but that does not mean it will continue in 2021. I believe digging out from coronavirus’s financial rubble will light a bullish fuse under another sector of the stock market in 2021. Infrastructure businesses could be the big story for the coming year. Granite Construction Inc (NYSE:GVA) is a company that could shine in 2021, and its shares are at an attractive level.

GVA has not been consistently profitable and has lagged many of its peers over the past years. However, a change of top management could put the company on a path towards leadership, and its recent track record of winning bids for projects comes at a time where infrastructure rebuilding will be in demand for all members of the heavy construction sector, leading to rising earnings and share prices on a sector-wide basis.

The weak US economy and the high unemployment rate should set the stage for an infrastructure rebuilding program

While the stock market is trading at all-time highs, technology stocks have done the best since the March lows. Wall Street

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The author always has positions in commodities markets in futures, options, ETF/ETN products, and commodity equities. These long and short positions tend to change on an intraday basis.