First there was BRIC, now there’s CEEMEA.
Brazil, Russia, India and China offered huge growth to investors, but it looks like the new hot spots are in Central and Eastern Europe, the Middle East and Africa.
Cramer heard the acronym used while listening to the Procter & Gamble conference call. (Remember, conference calls are where all the important news is located.) Apparently, the company has kept up 15%-20% growth rates in these regions. The good news for investors is that not too many people are using the term yet, so there’s a chance to get in early, Cramer said.
So aside from P&G, what other companies have great CEEMEA exposure? Cramer said he likes KBR and Foster-Wheeler, both of which are engineering and construction/infrastructure plays.
FWLT has been on a great run, and it wasn’t until the P&G call that Cramer said he realized it was because of CEEMEA growth. Twenty-five percent of Foster-Wheeler’s order backlog comes from the Middle East, while 7% of new orders do. Those orders are all in engineering and construction too, which covers refineries and chemical plants and on- and offshore oil and gas facilities.
KBR’s run is just beginning, Cramer said. He expects the stock to soon take out its high, especially if the Iraq war continues. KBR earns more than half its revenues from government and infrastructure work in the Middle East.
On a quick aside, Cramer recommended Central European Media Enterprises a long time ago, but he said it’s too expensive to purchase right now – at least until there’s a healthy pullback.
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