Maybe you missed your chance with Fluor. Maybe it was McDermott or Foster-Wheeler. But that doesn’t mean you don’t have a chance to play the infrastructure sector if you still want to, Cramer says. There’s a new publicly traded company out of California that holds a ton of potential for investors – Aecom.
Aecom is an engineering and construction infrastructure firm that just came public on Friday. The IPO was strong, but the tape was weak that day, so ACM hasn’t taken off the way Cramer thinks it should have. All the more opportunity for Home Gamers, he says. The company has a footprint on every continent, working on projects as diverse as building the rapid transit system under the World Trade Center in New York, the Sutong Bridge crossing the Yangtze River in China and even planning the 2012 Olympics in London.
Aecom has been around since 1980. It used to be a division of Ashland Oil before becoming its own business and changing its name from Ashland Technologies to Aecom. The biggest difference between it and compeititors like MDR, FWLT and FLR is that Aecom’s business is less energy-centric. It’s got a much more broadly diversified book of business, Cramer says.
Cramer says a great way to judge these companies is by studying their respective backlogs. Aecom’s backlog is up 63% year-over-year for 2006, and by March 31 of this year it had a $3.1 billion backlog of uncompleted projects under contract – up 21% percent from the already stellar 2006. That backlog gives ACM the earnings visibility that Cramer likes to see.
There’s a good chance the big institutional investors will join Cramer in recognizing that ACM’s estimates for this year are way too low, and they won’t miss the opportunity to get a piece of this burgeoning company if they missed out on its rivals.
Bottom Line: If the tape hadn’t been miserable on Friday, Aecom would be a $25 stock right now, Cramer says. You lucked out – this one is going much higher.