What happened

It's the day after the Georgia Senate elections, and all of a sudden, infrastructure stocks are hot again -- with a particular emphasis on stocks involved in building energy infrastructure.

As of 1 p.m. EST, shares of electric car charging network operator Blink Charging (NASDAQ:BLNK) are surging 7.8% higher and Vulcan Materials Company (NYSE:VMC) stock is up 9.8%, while a cumbersomely named small-cap stock called Infrastructure & Energy Alternatives (NASDAQ:IEA) is beating them both with a gain of 13.6%.

A man holds out his hand as stock arrows shoot out of it.

Image source: Getty Images.

So what

Why these three stocks in particular? Our first clue comes from TheFly.com, which reports today that analysts at investment bank Stephens just upgraded shares of Vulcan Materials to overweight, and raised their price target on the construction materials stock 16%, to $174 a share. That's great news for Vulcan investors, whose shares currently cost only $161 and change. But the reason Stephens is upgrading could be even better news for the other stocks in this group.

Stephens is encouraging investors to buy Vulcan shares on the theory that the new year will see passage of a federal infrastructure bill that will "greatly benefit volume in 2022" for suppliers of construction materials, like Vulcan. In this regard, the need to stimulate an economy damaged by the coronavirus could combine with the Senate election results in Georgia, which appear to have handed the Democrats control of both the White House and both houses of Congress -- improving the chances that an infrastructure bill can be passed and signed into law.

Now what

Stephens notes that Vulcan would benefit additionally from "incredibly robust" demand for housing this year, giving the stock a second path to growth. But just passage of an infrastructure bill alone -- perhaps in tandem with a "green new deal" for building out renewable energy infrastructure -- could be a boon to companies like Blink and its continuing rollout of new electric car charging stations. And of course, you have to figure that a company with "infrastructure and energy" right in its corporate name is positioned perfectly for these two possibilities.

Indeed, Infrastructure & Energy Alternatives just might turn out to be the most promising of these three stock opportunities. Although the company reported only $13.2 million in net profit over the past 12 months according to generally accepted accounting principles (GAAP), that number is more than twice what IEA earned last year. Moreover, free cash flow generation at IEA was a very robust $68.6 million over the past year. At a market capitalization of just $410 million, that works out to an ultra-cheap price-to-free cash flow ratio of less than six.

Almost entirely uncovered on Wall Street, Infrastructure and Energy Alternatives could be the small-cap stock to watch in 2021.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.