CEO who voted for Trump likes what he sees so far

How will Trump fund infrastructure projects?
How will Trump fund infrastructure projects?

Donald Trump is expected to unveil a massive infrastructure spending plan shortly after he takes office. So it should be no surprise that a company named U.S. Concrete has skyrocketed more than 30% since Trump won the presidential election.

The name says it all. U.S. Concrete.

How can it not do well if the federal government is serious about potentially spending $1 trillion on roads, highways and bridges?

I spoke to Bill Sandbrook, the CEO of U.S. Concrete (USCR), shortly after Trump's win. Sandbrook voted for Trump.

At the time, Sandbrook said he was optimistic that Trump's pro-growth policies -- particularly the plan to boost infrastructure spending -- would be good for this company.

I caught up with him earlier this week to get a sense of what he thinks now that Trump has made some key Cabinet appointments.

Sandbrook, who said he will be going to the inauguration in Washington next month, is still bullish on the outlook for the U.S. economy under Trump.

"I'm just as optimistic now about Trump. In his victory speech, he talked about infrastructure and it gave us hope," Sandbrook said.

Related: CEO who voted for Trump expects construction boom

U.S Concrete won't be bidding directly for any of this federal money. It acts as a subcontractor for big construction firms that will be competing for federal business.

The company sells ready-mixed concrete to construction firms in the San Francisco Bay area, New York and northern New Jersey, the metro Washington, DC area and Dallas. U.S. Concrete is based in Euless, Texas -- a suburb of Fort Worth.

More infrastructure spending should also help construction equipment giants Caterpillar (CAT) and John Deere (DE) as well as steel firms U.S. Steel (X) and Nucor (NUE).

Those stocks have also surged since Election Day. Many of them have been doing well for months. Investors assumed a Clinton or Trump win would lead to a bigger budget for infrastructure since the proposals have mostly received bipartisan support.

But Trump's win has kicked the infrastructure rally into even higher gear.

Fund managers for the JOHCM US Small Mid Cap Equity Fund wrote in a report this week that they expect construction firm Jacobs Engineering (JEC), building materials supplier Martin Marietta (MLM) and trucker Old Dominion Freight Line (ODFL) to be big winners too.

But Ben Morton, a portfolio manager focusing on infrastructure at Cohen & Steers, said the market still needs clarity about what exactly Trump wants to do. Will Trump focus more on bridges and roads? Shipping ports? The electric grid? Airports?

"This is complicated. A lot needs to take place to increase private sector investment in infrastructure," Morton said. "Infrastructure spending will be a priority, but with that said, nothing is a slam dunk. This could take time to develop."

Related: Deere plows higher on Trump construction boom hopes

Sandbrook conceded that the details of any stimulus plan still need to be worked out. Will it be a public-private partnership as some suggest? Will Congress really be willing to approve $1 trillion in spending or will it turn out to be less than that?

Sandbrook isn't sure that Trump will get the $1 trillion he's called for. But he's still confident that any large-scale infrastructure plan will benefit his firm.

He thinks that Trump's calls for tax cuts and fewer regulations could wind up giving U.S. Concrete a bigger boost for the long haul.

"A vibrant economy is more important than short-term infrastructure spending," he said.

Sandbrook said he also wasn't worried that Trump would continue to engage in heated protectionist rhetoric -- despite having Steve Bannon as an adviser.

There are some concerns that Trump could start trade wars with Mexico and China due to his proposals for big tariffs. Cracking down on immigration -- with repeated calls to build a wall on the border with Mexico for example -- have made many nervous too.

Related: Why Trump is wrong about Caterpillar being hurt by foreign competition

But Sandbrook thinks that when it comes to the economy and trade, Trump will rely more on advisers like Treasury Secretary pick Steven Mnuchin and Commerce Secretary nominee Wilbur Ross, than Bannon. And both are more pragmatists than ideologues.

"The protectionist rhetoric on the campaign was a means to an end," Sandbrook said, adding that Trump needs to advocate for fair trade as opposed to trade barriers.

Still, Sandbrook said one big concern about Trump is the unpredictability factor. His penchant for tweeting whatever he thinks -- and somewhat impulsively it would appear -- could be a problem.

Blue chip American companies like Boeing (BA), Lockheed Martin (LMT) and United Technologies (UTX) subsidiary Carrier have all come under attack from Trump. It's not just the media that Trump appears to bear grudges against.

Sandbrook said that big businesses -- and the market -- probably need to be prepared for more of the same for at least the next four years.

"Trump controls the stage. His advisers may want to dial him back though," he said.

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