We’ve continued to make great progress with the FTSE350 tips, with a very positive trading update from ME Group [LON:MEGP] last week leading to a 12.6% return, and the tailwind I had predicted from an incoming Labour government, along with strong trading from ventilation supplier, Volution Group [LON:FAN] delivering a 35% return since we added them to the FTSE 350 portfolio.
My other tips - JD Sports [LON:JD.], Watches of Switzerland [LON:WOSG], Chemring [LON:CHG], Future [LON:FUTR] and Rightmove [LON:RMV] have also seen positive updates in recent months, suggesting it is still well worth holding on to these shares for now.
For my tip for this month, I look to repeat a similar thesis as to my Volution Group tip back in October 2023, so if you haven’t had a chance to read that yet, I suggest taking a look back at the fundamental reasoning for choosing Volution Group at that time - which has delivered a 33% return in 8 months. In summary, back in October it was pretty clear Labour were going to win the UK General election, and therefore I predicted that Volution Group might do well if Labour were planning to spend on infrastructure projects and committing to improving the quality of social housing. This would provide a strong tailwind for Volution - the manufacturer and installer of ventilation components in the UK.
US focus on infrastructure
This time around we have a new political spectacle on the horizon, namely the prospect for a Republican, Trump presidency in the U.S.A. Whilst each presidential term might play out differently, we do have a guide to sector performance in the case of a new office. One sector that stood out in particular when Trump took office in January 2017 was infrastructure. A long held proxy for expectation of industrial output would be Caterpillar Stock [NYSE:CAT] - a company that sells heavy machinery and equipment needed for building roads, bridges or border walls in the case of Trump. In the first year of Donald’s term, Caterpillar posted gains of over 70%, as the new president vowed to spend big on infrastructure.
Despite Trump’s spending on infrastructure, and Biden’s ongoing trillion dollar infrastructure stimulus package, America remains in desperate need of infrastructural overhaul. The US Government estimate that approximately 200,000 bridges need repair, with Dams, Airports and Transport hubs largely built in or before the 1960’s to cater to roughly half the population constraint that exists today.
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