These stocks could be the biggest winners from Trump's border wall

Published Wed, Jan 25 20174:38 PM EST

President Donald Trump on Wednesday ordered the construction of a Mexican border wall that's estimated to cost between $15 and $25 billion, and presents a potential investment opportunity among material stocks, according to Bernstein. "We expect construction of the wall could add over 1 percentage point of growth per annum to US cement demand over 2 years, and much more to those companies with local production, notably Cemex," Bernstein analyst Phil Roseberg wrote in an email, pointing to research he originally published last year. Bernstein argues that cement is the "most cost-effective solution" to build the 40-feet-high structure proposed by Trump, which may require 7 million cubic meters of concrete and 2.4 million tons of cement in total. "We would expect that the Trump Wall will follow a similar design to the 420-mile Israeli West Bank barrier, large parts of which were built using precast concrete panels," he said. The United States border with Mexico expands over 1,989 miles. Given the topographical challenges and the massive undertaking to build the wall, the investment bank predicts construction materials are likely to be sourced locally, whether it's from the U.S. or Mexico, depending on which country pays for the wall. "On the U.S. side, we found that CalPortland and Cemex have a strong local presence in cement, ready-mix (RMX) and aggregates, while Martin Marietta and Vulcan have significant aggregate operations in the area. In Mexico, Cemex and GCC are well positioned in cement, aggregates and ready-mix," Roseberg said. Since 1990, the United States has already spent more than $7 billion to build 653 miles of border fencing. Bernstein says those undertakings have brought up a slew of challenges as developers struggled to build around protected wildlife areas, Indian territory, flood zones, deserts and ranches whose owners remain reluctant to sell their land. "The construction of a more substantial wall than exists at present would also likely require roads to be built for access: not a simple undertaking in desert and mountainous areas. These difficulties were illustrated during the construction of the existing fence which was beset by delays, surging costs and disputes with private land owners," Roseberg said.

Susana Gonzalez | Bloomberg | Getty Images

"We expect construction of the wall could add over 1 percentage point of growth per annum to US cement demand over 2 years, and much more to those companies with local production, notably Cemex," Bernstein analyst Phil Roseberg wrote in an email, pointing to research he originally published last year.

Bernstein argues that cement is the "most cost-effective solution" to build the 40-feet-high structure proposed by Trump, which may require 7 million cubic meters of concrete and 2.4 million tons of cement in total.

"We would expect that the Trump Wall will follow a similar design to the 420-mile Israeli West Bank barrier, large parts of which were built using precast concrete panels," he said.