The Easy Way Out

Hey Influence Traders:

I’ve already settled into the Miami scene, which means I’ve loosened a notch on my belt to make way for my mother-in-law’s cooking.

In other words, I’m fat and happy and feeling just a little bit lazy — just like one should on Thanksgiving.

Speaking of fat and happy, some companies will feast on the $1.2 trillion infrastructure bill signed into law by President Biden last week.

The direct beneficiaries are still getting sorted out, but there are some easy ETF plays to take advantage of sectors that will benefit.

Let’s look at three of those and — one surprise stock …

ETF: The Easy Way to Play

The infrastructure and industrial sectors are going to do well under the infrastructure bill. 

I’m following these ETF to get broad exposure while I identify individual securities:

      • Global X U.S. Infrastructure Development ETF (Ticker: PAVE): This is a great broad exposure play since PAVE holds roughly 100 infrastructure stocks.

PAVE holds small-cap to large-cap companies that derive at least 50% of revenue from infrastructure construction, materials and equipment supply and related services in the U.S.

      • iShares U.S. Infrastructure ETF (Ticker: IFRA): In addition to traditional infrastructure names, IFRA also includes 20 electric utilities and four water utilities, which will give even broader exposure tor infrastructure bill winners.

      • The Industrial Select Sector SPDR ETF (Ticker: XLI): XLI is one of the easiest ways to play infrastructure since it broadly tracks the S&P 500’s industrial sector.

It’s up close to 18% year to date.

EV Buses

The infrastructure bill also includes $7.5 billion for zero- and low-emission buses, which includes thousands of electric school buses.

Thomas Built, a subsidiary of Daimler AG – ADR (DMLRY), controls nearly 40% of the North American school bus market.

They’re having a happy Thanksgiving.

But Andrew Giovinazzi does not like it when I play with ADRs as they’re tough to trade.

Fortunately, the more than 500,000 school buses in the U.S. created the country’s largest public transportation network and a lot of opportunity.

More than 95% of school buses run on diesel, accounting for more than 5 million tons of yearly greenhouse gas emissions — and they are up for replacement.

In addition to the $7.5 billion for zero- and low-emission buses, the bill includes another $7.5 billion for EV charging infrastructure.

And that’s why I’m adding Proterra (Ticker: PTRA) to the Capitol Gains starting lineup.

PTRA can benefit from both spending buckets … and a third.

PTRA has three business units that can all receive infrastructure investments:

      • Transit Unit: builds battery-electric buses for school, coach, and shuttle
      • Energy Unit: builds charging infrastructure
      • Power Unit: provides battery technology, as well as electric drivetrains and high-voltage systems for commercial EVs

While sales are under $300 million, PTRA is anticipating a 25% increase in revenue in 2021 over 2020.

Now it’s just about Turkey time …

Cutting through the noise for you,

Frank

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