Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
|
|
|
|
Profit
from the $22 Trillion Global Infrastructure Boom
|
Published:
September 8, 2008
The
collapse of a major bridge in Minneapolis last August opened the
nation to a serious problem. Most bridges have a 50-year
lifespan, and the average bridge has been in use for 43
years. As you might expect, many are in a
state of disrepair. The Federal Highway Administration says
152,000 of the nation's 600,000 bridges (1 in 4) need major
repairs or must be replaced.
The price tag: $140 billion.
Other infrastructure also
needs a tune-up. Upgrading the nation's 3,500 unsafe dams will cost
$10 billion. The
Environmental Protection Agency says we need to spend $275
billion
to fix water pipes, and $390 billion more for water treatment
plants.
Utility lines need work, as do railways, river locks for
cargo ships, public parks
and highways. Overall,
the American Society of Civil Engineers (ASCE) says our infrastructure needs $1.6 trillion worth of
work.
If the story ended there, we'd have a
compelling investment thesis. But it doesn't. The growth in
emerging markets around the world has meant a boom in
infrastructure spending. In fact, a recent study by Morgan Stanley is forecasting
$22 trillion to be spent on emerging market infrastructure over the next
10
years.
One company -- ABB Ltd. (NYSE: ABB, $22.69)
-- is set to profit from this boom.
If you haven't
heard of ABB, don't feel bad -- you're not alone.
This Swiss company isn't particularly well known among U.S.
investors, but its reputation is well established in other parts of the world.
Power grids throughout the U.S. and Europe are in desperate need of upgrades and repairs.
Many of these systems were constructed in the 1950s and have
received only the bare minimum in maintenance during the past few
decades, despite steady increases in annual electric consumption.
According to
the Energy Information Administration, the United States
uses about 100 quadrillion (100, followed by 15 zeroes) BTUs of power a year. That total is expected rise +34% in the next 25 years.
Worldwide, power consumption is expected to grow nearly twice as
fast. Clearly, a large sum of money will have to be spent if
that much power is to
safely and
reliably get into the hands of those who need it.
That's where ABB comes in. The firm is a global
powerhouse in the fields of power and automation, supplying
products that help utilities and other industrial customers cut
costs and operate as efficiently as possible. The company's
diversified product portfolio includes things like assembly line
robots
-- but its most
promising divisions work with transformers, circuit breakers,
switchgear modules, capacitors, substations and other devices to
support the generation, transmission and distribution of power.
ABB is a world leader in power infrastructure,
working with customers in over 100 countries around the globe.
Within just the past few months, the firm has won contracts
worth $28 million in Turkey, $31 million in Switzerland, $45
million in Angola, and $113 million in India -- not to mention
being awarded a $233 million deal to supply the power system for
a new plant in Qatar.
The company is coming off an impressive quarter
that saw operating cash flows more than double from last year on revenues that
jumped +27% to a record $9 billion.
Demand has been pouring
in from everywhere: Orders are up +17% in Europe, +18% in the
U.S., +26% in Asia, and a hefty +98% in the Middle East and
Africa.
Overall, the company has received new orders
worth $11.3 billion for the quarter, causing its total order backlog to swell to
nearly $30 billion -- up from just $20 billion this time last
year. And for the first time ever, orders from emerging markets
outstripped those from the developed world.
Yet, despite
firing on all cylinders, the company's stock has been in the
doldrums along with
everything
else lately. As a result, this well positioned company can now
be picked up -35% below its $35 fair value.
ABB's
power divisions alone merit serious consideration -- its
other lines of business (which are benefiting from
robust demand from oil/gas and wind energy customers)
are just icing on the cake.
The stock is down right now because
short-sighted investors can't look beyond the next few
months and are worried that a temporary cooling of the
global economy will cause all construction activity to
grind to a halt. Those fears are unfounded, and
electricity demand clearly isn't going away.
With the shares now trading at a highly
attractive price-to-earnings-to-growth ratio (PEG) of 0.60, now is an opportune time to
begin accumulating a stake in this dominant
infrastructure player, whose business has nowhere to go
but up.
|
Nathan Slaughter
Editor
Half-Priced Stocks, The ETF Authority
|
| To receive
in-depth guidance on today's leading value opportunities, plus educational guidance, please subscribe to
Nathan Slaughter's premium value investing newsletter --
Half-Priced
Stocks |
|
|
|
Investing Doesn't Get Any Easier Than This |
Stock picker Amy
Calistri's strategy is as simple as investing gets -- just one idea
a month designed to make money in today's market. Invest this way
and you don't have to worry about oil prices, automaker bailouts, or
what the Fed is up to -- because every "bad" economic development
actually helps some investment or another.Your investing life can
get a lot simpler -- starting today.
Go here to learn about Amy's simple investing strategy.
|
|
|
