Pass on Dogecoin! These 3 Infrastructure Stocks are a Better Buy
StockNews
Published Jun 28, 2021 11:13AM ET
Updated Jun 28, 2021 12:31PM ET
Pass on Dogecoin! These 3 Infrastructure Stocks are a Better Buy
With China intensifying its crackdown on cryptocurrencies, and several other countries planning to restrict the use of cryptocurrencies, Dogecoin’s prospects look bleak. However, considering the increasing economic activities globally, and President Biden’s infrastructure plan, we think that investing in infrastructure-related companies CEMEX (CX), Owens (OC), and L.B. Foster (FSTR) could generate significant returns in the near term. So, let’s take a closer look at these names.Cryptocurrency Dogecoin has had a skyrocketing rally since the beginning of this year and hit its all-time high of $0.74 in early May, driven primarily by social media hype--with even Elon Musk using his "Saturday Night Live" performance to pump the token. However, Dogecoin has plunged close to 60% since its high in May. China’s crackdown on cryptocurrencies, given its alleged connection to money laundering activities and concerns over high energy consumption, is believed to have primarily driven this plunge. With China intensifying its crackdown and several countries planning to restrict the use of cryptocurrencies, Dogecoin is expected to witness further declines.
But while Dogecoin's prospects look bleak, the infrastructure sector is witnessing a solid revival with the reopening of economic activities. Moreover, a bipartisan agreement on a $973 billion infrastructure spending bill should bode well for infrastructure companies. Investors’ interest in the infrastructure space is evident in iShares U.S. Infrastructure ETF’s (IFRA) 20% returns over the past six months versus SPDR S&P 500 Trust ETF’s (SPY) 15.6% gains.
So, we think it could be wise to bet on fundamentally-strong infrastructure companies CEMEX, S.A.B. de C.V. (CX), Owens Corning (NYSE:OC), and L.B. Foster Company (FSTR) that look well positioned to benefit from the industry tailwinds.
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