Mark Twain is rumored to have said: “Through the gold rush, it’s an excellent time to be within the pick and shovel business.”

Whether he did in reality say these words or not isn’t all that necessary. The larger idea here is that there are likely to be less obvious ways to take advantage of situations at any time when a hot latest product hits the shelves.

An amazing example of that is present in the pharmaceutical industry. During the last couple of years, glucagon-like peptide 1 (GLP-1) agonists comparable to Mounjaro and Zepbound have revolutionized the best way care is provided to diabetes and obesity patients. Eli Lilly is the manufacturer of those blockbuster drugs, and investors have sent the stock soaring over the past two years.

Nevertheless, the investment opportunity surrounding the GLP-1 realm goes much deeper than pharma stocks. One company that’s benefiting big time from rising demand for GLP-1 drugs is Jacobs Solutions (NYSE: J).

Let’s break down what Jacobs Solutions does, and explore why now looks like a lucrative opportunity to scoop up some shares.

What does Jacobs Solutions do?

Jacobs Solutions is in the development business, but not in the best way you may think. As a substitute of constructing houses, Jacobs focuses on extremely sophisticated and time-consuming infrastructure projects, comparable to data centers, spacecraft, city planning, and life sciences facilities.

A few of the company’s customers include NASA, Procter & Gamble, and Bristol Myers Squibb.

What makes Jacobs Solutions so unique?

During a recent interview with CNBC’s Jim Cramer, Jacobs’ CEO Bob Pragada shared a extremely interesting perspective on how the corporate is playing a key role in the long run of GLP-1 development working alongside Lilly.

There are a few necessary ideas to unpack from the video shared above.

Pragada explains just how complicated Lilly’s GLP-1 facilities are. He makes it clear that these projects usually are not simply up for grabs and available for quite a lot of builders to bid on. Since competition is amazingly limited and the necessity for Jacobs’ expertise is high, the corporate is in an excellent position to command pricing power for its services.

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Given these dynamics, I’d argue that Jacobs has built a relative competitive moat. Moreover, the subtle opportunity with Jacobs is that the corporate tends to win repeat business from its customers during expansion phases.

As Cramer alludes, it’s entirely possible for Lilly to construct additional factories in Asia and Europe should demand for its GLP-1 medications warrant the investment. If this happens, Jacobs looks well-positioned to win this business in the long run and be a tangential beneficiary of varied themes fueling its customers.

Why now looks like a terrific opportunity to purchase Jacobs Solutions stock

I see a couple of reasons to purchase Jacobs stock right away.

First, the corporate recently announced that it’s spinning off its Critical Mission Solutions (CMS) business, in addition to segments of its Divergent Solutions business — specifically the Cyber & Intelligence business.

Pragada notes that divesting these non-core assets will help make Jacobs “a more focused, higher-margin company more closely aligned with key global mega trends.”

I find these remarks encouraging and see the spin-off as an indication that Jacobs understands where its growth is coming from, and where the corporate desires to proceed investing.

In accordance with JP Morgan, the full addressable market (TAM) for GLP-1 treatments could reach $100 billion by 2030 just within the U.S.

To me, these forecasts imply that GLP-1 demand might be here for quite a while. Due to this fact, I’m bullish that Lilly might want to proceed investing in infrastructure as a way to meet supply and demand capacities. For these reasons, I believe Jacobs’ relationship with Lilly could possibly be transformative.

Outside of the burden loss space, Jacobs can be playing a quiet role in various areas of artificial intelligence (AI), including data centers and electric vehicle production.

As of the time of this text, Jacobs trades at a forward price-to-earnings (P/E) multiple of 16.1. Compared, the forward P/E of the S&P 500 is around 21.7.

The corporate’s discounted valuation relative to the broader market could suggest that investors are overlooking Jacobs Solutions. While the corporate itself is probably not selling breakthrough medications or AI software, these opportunities still represent major bellwethers for Jacobs because it helps leading players within the background.

The long-run secular tailwinds fueling lots of the markets during which Jacobs operates, combined with the corporate’s competitive edge and reasonable valuation, make it a compelling investment opportunity in my eyes.

Do you have to invest $1,000 in Jacobs Solutions right away?

Before you purchase stock in Jacobs Solutions, consider this:

The Motley Idiot Stock Advisor analyst team just identified what they consider are the 10 best stocks for investors to purchase now… and Jacobs Solutions wasn’t one in all them. The ten stocks that made the cut could produce monster returns in the approaching years.

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JPMorgan Chase is an promoting partner of The Ascent, a Motley Idiot company. Adam Spatacco has positions in Eli Lilly. The Motley Idiot has positions in and recommends Bristol Myers Squibb and JPMorgan Chase. The Motley Idiot has a disclosure policy.

If You Like Eli Lilly, Then You may Love This Little-Known Specialty Manufacturing Stock was originally published by The Motley Idiot