With the markets anticipating an infrastructure bill, it's a good idea to anticipate which stocks are set to do well. In this particular case, let's focus on three less visible stocks with strong exposure to infrastructural spending. Namely, engineering design software company Autodesk (NASDAQ: ADSK) , metal coating and infrastructure solution provider AZZ Inc (NYSE: AZZ) , and maintenance and infrastructure equipment manufacturer Federal Signal (NYSE: FSS) . Here's why all three are attractive.
The architecture, engineering, and construction (AEC) software company is a great business with a lot of potential for growth in the coming years. The shift to subscription-based sales rather than license sales will make it easier for the company to retain existing customers and convert non-compliant customers. Meanwhile, the increasing use of digitization and cloud-based collaboration within AEC design also plays to Autodesk's strengths as a software solution provider.
There's little doubt that Autodesk is a great company, but is it a great investment? With a current market cap of $62.8 billion, the company trades on nearly 47 times its 2020 free cash flow (FCF), and there are some question marks around its guidance.
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3 Under-the-Radar Infrastructure Stocks for an Infrastructure Bill