Billionaire Alex Waislitz says infrastructure is the investment theme his company Thorney Investments is looking at now, as an avalanche of government spending spills over into large and small companies.

“Regardless of the outcome of last month’s federal election the level of infrastructure spending by both Federal and State governments would be likely to continue unabated for the foreseeable future,” he wrote in a chairman’s letter to shareholders.

“Since then, if anything infrastructure has become even more of a priority.”

He cited the Queensland government approvals for Adani’s controversial Carmichael coal mine in the Galilee Basin as well as the rising oil and gas boom which is leading to a “large number of significant multi billion dollar mining and oil and gas projects”.

Yesterday, energy consultancy Energy Quest produced figures proving that a renaissance in oil and gas exploration is under way, a trend reported by Stockhead in May.

Spending on road, rail, airport, communications and renewable energy projects as well as the wealth of federally budgeted projects are also behind the “boom”.

Waislitz isn’t the only investor to be eyeing off the ripe infrastructure sector.

Perennial Value Management head of research Andrew Smith said in May a government-funded East Coast infrastructure boom is expected to run for the next four years at least.

“The work hasn’t gone away; the actual pipeline has got bigger. There’s unprecedented work,” he told Stockhead.

“It feels a lot like the start of the mining boom did in 2009 and I think we’re here now in the infrastructure space.”

He was picking Acrow Formwork (ASX:ACF), Veris (ASX:VRS), and SRG Global (ASX:SRG) as his favourite infrastructure investments.


 

What does Waislitz like?

Waislitz says one of Thorney Opportunities Fund’s (ASX:TOP) largest holdings is Service Stream (ASX:SSM), a communications provider for electricity, water and gas projects.

Unfortunately, they got in at 20c five years ago whereas investors today will be buying in at all time highs of around $2.70.

Waislitz, however, reckons strong management and exposure to the “infrastructure boom” will keep driving that up.

Construction and engineering Decmil (ASX:DCG) is more in the small cap league, with a market cap of $207m compared to the $1bn of Service Stream.

“In the past few months alone DCG has announced that it has been awarded several new road upgrade and wind farm projects totalling in excess of $250m, underscoring not only the amount of activity going on around Australia but also the growth potential of well run companies exposed to the sector,” Waislitz wrote.

Southern Cross Electrical Engineering (ASX:SXE) has been awarded several new contracts in the last few months as well, and offshore oil and gas services provider MMA Offshore (ASX:MRM) have also caught the Waislitz eye.

And he believes South Australia focused oil and gas producer Cooper Energy (ASX:COE) is in a prime position to supply the east coast gas market.

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