"Street Critique"-Hilary Kramer, Personal Finance Editor, AOL
Wednesday, May 16, 2007JEFF YASTINE: Tonight`s "street critique" guest says growth in the global economy is driving a surge in business for infrastructure stocks. She`s Hilary Kramer, market strategist and personal finance editor at AOL. Hilary, welcome back to NIGHTLY BUSINESS REPORT.
HILARY KRAMER, PERSONAL FINANCE EDITOR, AOL: Thank you, Jeff.
YASTINE: You know, when we talk about infrastructure, I think of things like road building, bridges, sewer pipes, dams, those sorts of things here in the U.S. Why look at that kind of a sector?
KRAMER: Infrastructure is the fastest growing sector probably of any sector across all of the markets, because you don`t just have in the U.S. a need for upgrading our current infrastructure. But you have infrastructure needs all across the emerging markets -- construction projects that span building bridges, highways and water filtration projects.
YASTINE: I see, by way of a small plug, we have a series coming out in June called "State of Repairs" that's looking at infrastructure in the U.S. and the need for upgrades and the deterioration in some of that infrastructure. Let`s talk about specific issues that you are looking at for this sort of global play on infrastructure. The first one is Suez (SZE)?
KRAMER: Yes. Suez is a French utility company, one of the largest in the world, but they also have construction engineering. They`re a big player not just in drinking water, but drinking treatment facilities and they`re also in waste management, hazardous management, waste to energy and they have a 50 percent quarterly earnings growth. You can`t go wrong with a company like Suez. It`s a great global play.
YASTINE: All right. There`s another one you like called Cemex (CX). This is, a lot of us are familiar, it`s the Mexican cement company.
KRAMER: That`s right, cement and concrete, third largest provider in the world, very high tech company, run by the Zambrano family and they`re supplying concrete and cement worldwide.
YASTINE: I noticed a really bit drop off though, somewhere about a year ago. Is there a particular aspect to that as to why it fell so much?
KRAMER: No, there was some insiders selling and then all it takes is one contract to go down and a stock like that can move. It was really more just a buying opportunity and Cemex is just going to continue going up.
YASTINE: I see, all right and there's another one that you like. This is a recent IPO, a spin off really from Halliburton, KBR (KBR).
KRAMER: KBR. You are buying a company that`s undervalued. KBR is one of those stocks that has a bad reputation. They`ve done maintenance at a lot of the military facilities. The reputation came out of Iraq. But you are talking about a company that makes platforms, pipelines for the oil and gas industry, petrochemicals all over the world. KBR, one day that is going to be in the past and KBR is going to be a company that`s going to make shareholders a lot of money.
YASTINE: We got time for one more.
KRAMER: OK, Brookfield Asset Management (BAM), one of my favorites. That's a company just to buy and hold. The ticker symbol is BAM. You can buy it and hold it forever, because it's a residential and commercial real estate play but they have a whole infrastructure business, including hydroelectric power plants in Latin America. It may be spun off. You can buy a company like BAM, hold it forever and it will just keep growing in your portfolio.
YASTINE: Hilary, any personal disclosures on these.
KRAMER: Not on these.
YASTINE: All right, Hilary, thanks for your time. Thanks for the stock tips.
KRAMER: Thank you Jeff.
YASTINE: Our guest, Hilary Kramer, personal finance editor at AOL.
