Technology Infrastructure Stocks To Consider

The nation's digital infrastructure continues to be a problem. In the United States, only 27% of its residents subscribe to broadband internet service and less than 50% of homes even have access to high-speed internet. U.S. households that lack broadband represent a loss purchasing power of about $450 billion. For every 7% increase in penetration, nearly 2.4 million jobs are created and the economy receives $134 billion in direct impact.

Betting On U.S. Infrastructure Growth
With so much potential money needed for various projects, it's no surprise that investors want infrastructure in their portfolios. Funds like the SPDR FTSE/Macquarie Global Infrastructure 100 (NYSE:GII) allow investors to own a wide swath of the prominent companies associated with the sector. However, there are plenty of small and mid-cap companies just out of reach of these indexes that stand to benefit from increasing infrastructure spending. Here a few top picks.

General Cable (NYSE:BGC) maybe the big shot when it comes to providing transmission wires and bridge cables. However, there are plenty of smaller companies as well. Small caps Coleman Cable, (Nasdaq:CCIX) and Encore Wire (Nasdaq:WIRE) could see their earnings and share prices excel faster than the big boys. Encore trades at just 1.3 times book value and has no long term debt, while Coleman is making acquisitions into the more lucrative power management and efficiency sectors. (For related reading, see Investing Below Book Value)

One of the biggest issues is making sure that rural America has access to broadband and high speed internet. Companies that produce equipment for Tier 2 and Tier 3 carriers such as Frontier Communications (NYSE:FTR) should greatly benefit from any build-out. Communications equipment manufacturers and middle-mile companies such as Calix (Nasdaq:CALX) and Infinera (Nasdaq:INFN) make great plays on the need for faster internet speeds.

Bottom Line
Technology infrastructure in the United States continues to suffer from a lack of investment. With much spending and work needed to be done, a variety of companies, both small and large, will see their fortunes grow. Investors looking for plays may want to consider some of the small fries within the sector for portfolio additions. (For related reading, take a look at Build Your Portfolio With Infrastructure Investments.)

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