The collapse of the Francis Scott Key Bridge in Baltimore last month was, in some ways, a freak accident. However, it also highlighted decades of underinvestment in US infrastructure, which has only started to be corrected in the past few years.
IC TIP:
Buy
Tip style
Growth
Risk rating
Medium
Timescale
Long Term
Bull points
- Pricing power
- Boost from US government subsidies
- Strong balance sheet
- Significant barriers to entry
Bear points
- High valuation
- Exposure to the residential housing market
Before the collapse, the bridge was considered to be in “fair condition”. This rating indicates that all primary structural elements were sound but that the bridge may have had some minor problems. ‘Fair’ sits just above ‘poor’ in the federal rankings.