Congressional Democrats and Republicans are expected to pass a bipartisan infrastructure bill. Once the ink has dried, three (almost) penny stocks are well-positioned to get a big boost from the deal.
Polls show that a majority of Americans support enhancing the country’s dilapidated infrastructure. While some aspects of the bill are up for debate, Democrats and Republicans agree on funding for roads, bridges and broadband internet.
Both sides of the aisle are motivated to pass the bill. I believe Congressional Republicans want to avoid being seen as obstructionist and uncaring. Likewise, Congressional Democrats do not want to be seen as uncompromising and out-of-control spenders.
The final bill has not yet been hammered out, but some companies’ products are relevant to the goals of both parties. Two penny stocks — and one stock trading for under $6 — stand to benefit from a bipartisan infrastructure bill:
This is not an exhaustive list. The infrastructure bill may ultimately include funds for Democrats’ priorities despite Republican opposition. Investors should not rule out penny stocks that are relevant to only one party’s goals. However, these three stocks have the best chance to gain from any infrastructure bill.
Penny Stocks: AmpliTech Group (AMPG)
Although AmpliTech’s shares are trading slightly above the $5 limit for penny stocks, the company’s market capitalization is very low at $52 million.
AmpliTech develops broadband telecom amplifiers. Sales should get a meaningful boost as rural broadband coverage is expanded. The company is also developing products that will enable and improve 5G access. Demand for their technology can increase if telecom companies convince Congress to include 5G infrastructure funding in the bill.
Additionally, some of AmpliTech’s biggest customers are satellite communications companies. Satellite technology could also play a part in the push for expanded broadband internet.
AmpliTech’s revenue has increased significantly in recent years, rising steadily from $1.4 million in 2017 to $3.5 million in 2020. Combined with the company’s rural broadband potential, this strong growth trend makes AMPG stock worth considering.
UTStarcom (UTSI)
Changing hands for less than $1.50 per share, UTStarcom is a telecom infrastructure company. Its technology uses WiFi to offload 3G and 4G data for more efficient wireless broadband access. Currently, the company is focused on applying its technology to the delivery of broadband services.
UTStarcom offers a range of internet access products, including Broadband Network Core devices that help operators provide services and monetize their network infrastructure.
The company has also been developing 5G technology. For example, late last year, UTStarcom launched a packet transportation product for 5G systems.
In addition to a potential boost from the infrastructure bill, UTStarcom is a major player in the internet protocol TV (IPTV) sector. The industry is expected to grow significantly over the next six years.
Penny Stocks: Taseko Mines (TGB)
Taseko owns and operates Canada’s second-biggest copper mine, which generates about 140 million pounds of copper annually. Once its permit is approved, Taseko plans to open a new copper mine in Florence, Arizona. The new mine should produce about 85 million pounds of copper per year.
Copper prices have reached multi-year highs. Additionally, electric vehicles (EVs) use a great deal of copper and will drive demand for the metal, Taseko reported.
President Joe Biden’s infrastructure plan includes a tremendous amount of money for EVs and charging stations. But even if Republicans block the funds, EVs and broadband should boost copper prices. In turn, those positive catalysts should lift Taseko’s financial results and its stock.
Indeed, those trends are already starting to take hold. The company’s first-quarter EBITDA soared 412% year-over-year (YOY) to $30.3 million. Its shares have climbed more than 20% in the last three months, 70% in 2021 and 400% YOY.
“Strong earnings in the first quarter were supported by a steadily rising copper price which reached its highest price in a decade,” said Taseko CEO Russell Hallbauer. He added that the company should start building its Florence mine soon. TGB stock has multiple opportunities for growth and will be a strong buy once the infrastructure bill passes.
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On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.
