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Apr.20
7:20 PM ET
Monday, 20 Apr 2009
Mad Mail: The Best Infrastructure Play?

Jim: Thanks for navigating us through the rocky shoals of the last 18 months. With your help, I've managed to stay afloat. I want to get in on the upcoming infrastructure action, but I can't decide between AECOM Technology [ACM  Loading...      ()   ] and URS [URS  Loading...      ()   ] - can you toss me a line? --Todd

Cramer says: I think URS is a serial-misser of quarters, they've had a couple good, a couple bad. AECOM has done a remarkable job, there was a secondary that was much lower so you need to wait for a pullback, but the answer is ACM.

          ___


Jim: I have recently been picking up shares of Permian Basin Royalty Trust [PBT  Loading...      ()   ]. I read in PBT's most recent annual report that they have 6.8 years of reserves remaining. At what point will the dwindling reserves begin to impact the price of the stock? Also, what would happen if I held on until the end, would my investment then be worth $0, or is there some underlying value to the trust, such as land, etc.? --Chris

Cramer says: They've actually raised their dividend, you're right, their time, it's got about seven years of reserves. If the reserves got to below five you would start seeing a real decline in the stock, so I applaud your decision to get the annual, but these are done on a quarterly basis, so you should check out the report they just put out.

          ___


Jim: How do I use cash flow to determine a company's financial strength? I understand that total cash flow is the sum of operational, financial and investment cash flows. However, when totaled together, total cash flow is negatively affected by stock repurchases and loan repayments (financial) and acquisitions of equipment, other companies, etc. (investment). These are things that normally would make a business more viable. How do I best use this tool? --Bill

Cramer says: I'm going to turn you on to either Real Money or the best cash flow book, Jim Cramer's Mad Money. I absolutely want you to use cash flow because a lot of companies, like Comcast [CCW  Loading...      ()   ] (for example), it is hard to value them just on EPS because they generate so much cash.






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