Morgan Stanley’s Slimmon says U.S. infrastructure is ‘very powerful’

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Morgan Stanley’s Slimmon says U.S. infrastructure is ‘very powerful’

Stocks in the infrastructure sector aren’t always top of mind. When it comes to investing, tech stocks like chipmaker Nvidia or Novo Nordisk in the weight loss space have been the headline-grabbers over the last year. But investors who want to diversify their portfolios away from those popular names and themes can consider the infrastructure theme, says Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment Management. Speaking to CNBC’s ” Street Signs Asia ” on Oct. 2, Slimmon described the sector as being “very powerful in the U.S.,” citing increased government spending on infrastructure and reconstruction needs from Hurricane Helene as reasons for his bullish stance. “Number one, you have big infrastructure spending by the national state governments. But then secondly, and it’s very sad to say, but reality is, we have a section of the country that is in western North Carolina, Georgia, eastern Texas, the size of Massachusetts. It’s just been destroyed, and they’re going to have to rebuild roads and bridges,” he said. Hurricane Helene hit Florida’s Big Bend region on Sept. 26 and has caused widespread destruction, leading to collapsed roads, infrastructure damage, flooding and a ****** toll of more than 200 as of Oct. 4. Stock pick Slimmon is bullish on equipment rental company ******* Rentals . Headquartered in Connecticut, the company has 1,520 rental locations in North America, 38 in Europe, 23 in Australia and 19 in New Zealand, making it one of the largest equipment rental companies worldwide. URI YTD mountain YTD shares of ******* Rentals Shares in ******* Rentals trade on the New York Stock Exchange, and are up over 40% year to date, and over 80% over the last 12 months. KeyBanc Capital Markets’ analysts identified ******* Rentals as “interesting acquirers,” citing its “strong history of driving solid returns through large deals each year.” One such deal is its acquisition of Yak Access, a construction company and supplier of hardwood mats, which concluded in March. “We think the company will likely continue to pursue higher-margin Specialty deals in increasingly niche areas as management works to improve its competitive moat,” they added. According to FactSet data, of the 24 analysts covering the stock, 11 give it a buy or overweight rating while seven have a hold rating and six have either an underperform or sell rating. The average price target on the stock is $759.47, giving it 4.6% downside potential.

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