Investing in small cap companies can provide large-scale returns, especially if you add companies that have solid business models with consistent revenue growth. India Globalization Capital (AMEX: IGC) is a company that provides a strong market opportunity for your portfolio. IGC controls two infrastructure companies in India, which have three core competencies:
- Highway and other heavy construction
- Mining & quarrying
- Civil construction and engineering of high-temperature plants
Jonas Elmerraji from TheStreet.com has this to say about infrastructure investing, “Infrastructure lends itself to nice, steady returns over the long haul. When you invest in infrastructure, you’re investing in a long-term, fixed asset. And it’s that underlying concrete asset that makes infrastructure investments look very attractive.”
In a recent BusinessWeek article, James Holloway pointed out that “infrastructure assets are long-lived, with bond-like characteristics; namely, stable cash flows cash-flowlinked to inflation.” He also noted that competition isn’t much of a concern for infrastructure companies. All told, infrastructure’s benefits are pretty compelling.
IGC provides the unique opportunity to invest into the Indian infrastructure sector. The company is one of the few ways to invest in Indian infrastructure as it is the only Indian infrastructure company trading in the U.S. Currently trading at about 5 times forward earnings, IGC is currently undervalued. If the company were to trade in line with their peers, the Company would trade at 30 times forward earnings. With their seasoned management team and India’s rapid, long-term growth, India Globalization Capital is primed for strong growth and upside potential for investors.