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Sunday, March 22, 2009

My Best April Top Stock Picks ( 2009 )

1. Fluor FLR 36.55 as 3/22 target price 45.00 a share by 9/09
Cramer thinks increasing oil prices will boost business for an infrastructure play like Flour.Fluor Corporation (Fluor) is a holding company that, through its subsidiaries, provides engineering, procurement and construction management (EPCM) and project management services. Fluor serves a number of industries worldwide, including oil and gas, chemical and petrochemicals, transportation, mining and metals, power, life sciences and manufacturing. Fluor is also a primary service provider to the United States Federal Government. It performs operations and maintenance activities for major industrial clients, and also operates and maintains their equipment fleet. The Company is aligned into five principal operating segments: Oil and Gas, Industrial and Infrastructure, Government, Global Services and Power. Fluor Constructors International, Inc., which is organized and operates separately from its business segments, provides unionized management, construction and management services in the United States and Canada, both independently and as a subcontractor on projects to its segments.Flour is best of breed when it comes to American infrastructure stocks. They have a tremendous balance sheet, with over 2 billion in cash and only 18 million in debt coming due over the next five years. Management is very on hand .great sector. this company has its hand in major developments across the world on current projects and currently planned future projects. I learned about FLR through research on USU (energy/uranium play) which has a large plant being built, borrowing big bucks to do so, and FLR being hired for the project. FLR's foothold on the industry has positioned itself well for the next decade. They have been conservative with their balance sheet and not overextended themselves during the boom years, and now, at today's levels, appear to be fairly priced - expecting this company to be perform well ahead of the S&P of breed. Perhaps Flour will use its strong balance sheet to make a few below it's lower bollinger band, and a 1.35 Beta, I suspect this cash flushed company will destroy the S&P when the markets turnaround. It's also got very attractive fundamentals, with 2009 earnings not to bad relative to 2008 . Until the package come thru within the next few months , buy on the dips down.

2. Vale RIO 13.93 as of 3/22 target price 21.00 by 12/09
Cramer’s bullish on RIO.
Companhia Vale do Rio Doce (Vale) is a Brazil-based company engaged in the metal and mining industries. The Company provides components for such products as appliances, electronic equipment, cars, computers and construction materials, among others. The Company is also active in the exploration of iron ore, nickel, aluminum, copper, coal, cobalt, precious metals, potassium and other minerals. Vale operates logistic systems in Brazil, including railroads and maritime terminals, which are related to the mining operations. The Company’s main subsidiaries are Brasilux SA, Companhia Paulista de Ferro Ligas, CVRD Overseas Ltd and Docepar SA, among others.Copper and commodities will continue to climb while the rest of the market flounders.RIO is a complicated company. I like it a lot though. My fairly uneducated glimpse of the industry leads me to believe that Vale is more agile than other competitors because it's smaller than rivals Rio Tinto and BHP.Long term I think that this is a young Oracle of Omaha pick.More countries than the U.S. are planning on infrastrusture to help rebound their economy.This company provides a necessary materials to worldwide clients. RIO has outperformed the market for several years and I believe the current downturn in the price of RIO is only a result of the slump in the US economy and stock market.Brazil's Vale the world's largest iron ore producer, has declared force majeure on some iron ore cargoes destined for China, helping lift the spot price of the raw material to a new record. The surge in spot prices makes it more difficult for steel mills to limit price increases in ongoing negotiations for next year with the world top miners. With iron ore at an all time high and a shortage of raw material forcing Chinese mills to scale back production in November after a record output of 42.92 million tonnes in October. Chinese steel output dropped to 39.69 million tonnes last month, its lowest level since March. If RIO can increase output and clear some of the congestion at ports it could have a solid 2009. Vale raised 18.4 billion reals ($11.5 billion) after underwriting discounts and commissions, the biggest share offering ever by a company in Latin America's largest economy. The funds will be used for general corporate purposes which may include strategic purchases. In 2007, Vale purchased Inco Ltd., a nickel miner. The company is also spending $59 billion over five years for investments into the company.Obama's infrastructure plan plus China's and India's economic growth as well as other emerging markets will position RIO very well in the long run.
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