1.10.2022 We believe Quanta Services (PWR) works as a go-to “picks & shovels” as a potential pure play for domestic energy transmission infrastructure. A leading specialty construction services franchise, PWR fits our Climate Sustainability megatrend.
According to our research, a number of megatrends are driving our future. Within these overarching themes are companies that may have the potential to exploit changes in technology, consumer preferences, demographics, and environmental sustainability. These changes can lead to significant increases in their total markets, earnings trajectories and market capitalizations. We believe Quanta Services is one of these companies.
- PWR, a potential Core Holding for Energy Transition portfolios as a go-to “picks & shovels” potential pure play for domestic energy transmission infrastructure. A leading specialty construction services franchise in this field, we believe PWR aligns with the electrification of everything within the Climate Sustainability megatrend.
- Secular Growth Outlook underpinned by numerous durable trends:
- Grid modernization
- Renewables integration
- EV penetration plus other broad-ranging electrification initiatives
- 5G network buildout
- Rising customer outsourcing
- Blattner acquisition expands PWR into solar, wind and EV infrastructure
- Infrastructure Stimulus – The recently passed infrastructure plan should accelerate the strengthening U.S. electric grid. We also believe some form of the Build Better Back legislation (BBB) will eventually become an incremental driver of electrification.
- Acceleration & Expansion of Clean Energy & Infrastructure Opportunity Set – Following several weather/fire events over the past several years, significant investment is being made to harden power grids to be better prepared for severe weather events in the future. We believe further large- scale investment in the power and utility grids will be required as EV adoption, energy electrification, carbon emission reduction and increasing renewables generation initiatives continue to unfold.
- Communications and 5G – PWR has identified the rollout of 5G wireless networks in North America as needing ~$275B of infrastructure investment that the company is well positioned for, given its expertise in both telecom and electric power infrastructure (both of which are expected to be necessary as new equipment will need to be installed).
PWR is 1.52% of FFND as of 1/7/2022.
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