The title says it all. Global economy is on the rise with never-before-seen demand for natural resources and their applications. Indeed bridges, roads, rails, pipes, filters, pumps and other such systems, which often make up the difference between a third world economy and the western world, are being put to use in every corner of the developing world. Of course, to go out and buy all the stocks listed here would be an exercise in non-diversification and I strongly advise against it. The steep drop in the market this week is an opportunity to start accumulating some of these stocks. For those who like to track these, I have created a trackable portfolio of these stocks here on Stockpickr.com.

Chicago Bridge & Iron Co. (CBI) - This is a Dutch infrastructure play that has its hands wet in water, oil, chemicals, power, metals and mining. The company provides engineering and construction services for all of the above industries and its presence in Europe makes it a unique play on global, specifically European economic expansion.

The company has only $25 million in debt, which pales in comparison to the almost $700 million it has in cash. With $7 per share in cash, CBI trades at a mere 18 times 2008 earnings and its valuation can be summarized in one word - cheap.

Earlier this month, Chicago Bridge & Iron Co., was awarded two Middle East contracts with a combined value of $130 million. With demand for infrastructure in under-developed economies, this is just one of many contracts to come their way.

Foster Wheeler (FWLT) - Foster Wheeler is a Cramer favorite. He spotted it when no one had heard about it. The stock has tripled in the last 12 months and most people believe the run is far from over. The last time this company reported earnings, their profits showed a quarterly increase of almost 700% over the same quarter last year.

Foster Wheeler designs onshore and offshore oil and gas rigs, natural gas liquefaction facilities oil refineries and other facilities for the petrochemical industry. Additionally, the company also provides infrastructure support for power plants and waste processing plants.

2006 was a banner year for Foster Wheeler. That is the year the company went from losing $110 million the year before to making $260 million. Here is where it gets a little tricky. The second quarter of 2006 was a huge one for them and it will be hard to top that by a huge margin this year. But if there is one company that can pull it off, it is Foster Wheeler. The company has surprised to the upside last 4 quarters in a row by 44%, 57%, 69% and 113% respectively – no small feat. I believe the company can easily earn $6 per share this year, considering that they raked in $1.60 per share just in the first quarter. A company growing this fast, deserves a multiple of at least 25, which puts the target price at $150. Of course, a lot can change come Aug 8th, when the company reports their second quarter results.

McDermott International (MDR) – This is an energy services company that installs offshore drilling rigs, pipelines and subsea production systems. It also provides nuclear components to the US government and constructs electric power generation systems.

Power is fast becoming a problem in the US, starting from the blackouts in California back in 2001 to the recent power outage in New York. Many experts believe that in the US alone, billions of dollars need to be invested to upgrade and maintain our power grids and power lines.
A triple digit earnings and revenue growth story trading at under 20 times earnings makes for a good story in any market, let alone one of the best bull markets in energy. Margins at the company have never been higher and there is plenty of backlog to keep the company growing.

Flowserve (FLS) – Flowserve manufactures engineered pumps, valves and mechanical seals for fluid control systems. It serves oil and gas, chemical, general industrial, power generation, and water treatment sector with operations in 70 countries in North America, Europe, Middle East, Africa, Asia Pacific, and Latin America. In 2006, roughly 65% of Flowserve's business was generated outside the U.S., with a total of $3 billion in sales.

Flowserve is the second largest producer of pumps and the third largest producer of valves. The company also serves as an after-market services provider. While margins have been shrinking, the company’s backlog is worth $1.9 billion – an increase of 18% over last year. Even then, the company hopes to improve margins through its after-market services, which have higher margins.

Geographically, Europe accounts for the largest chunk of Flowserve’s revenue, while oil and gas were the top industrial application for Flowserve’s products in 2006. Overall, earnings are up 80% over last year, and with the insatiable demand for natural resources, Flowserve’s flow control pumps, valves and seals will continue to see increased demand from chemical, petroleum and water related interests.

Itron (ITRI) – Itron provides intelligent automated power and water meters and analytical software applications that help determine usage patterns and inefficiencies via data collection. In other words, Itron’s products enable water and power systems to perform more efficiently and reduce waste. There is a lot of demand for such products due to the short supply of energy and clean drinking water and Itron’s recent acquisition of Actaris Metering Systems means that nearly 8,000 utilities in over 30 countries worldwide use Itron’s meters to optimize the delivery and use of energy and water.

2007 earnings haven’t exactly been stellar, but this is due to the fact that the company acquired Actaris and has been busy investing in new technologies that would enable them to compete effectively in this world of green energy, conservation and automation.
The stock trades at a PEG ratio of less than 0.8 and at less than 25 times earnings, which makes it an attractive buy despite 50% gains in the last 12 months.

Komatsu (KMTUY) – Komatsu Ltd. is a Japanese manufacturer of construction and mining equipment, industrial machinery & vehicles and electronics products. It is also expanding its businesses into other areas such as housing, transportation and logistics equipment and has been successful in tapping nearby developing markets of China and India. The company is the Japanese version of Caterpillar, and is the second largest provider of mining equipment in the world with over 2000 employees just in the US.

Lately, the company has been increasing production capacity, decreasing costs and expanding operations in India. Additionally, it is focusing on post sales servicing of equipment, which itself is a very lucrative business. In the fiscal year ending March 2007, the company reported an increase in earnings of 42% over 2006, on the heels of a 77% increase over 2005.

I recommended this stock back in March of this year, and investors who bought it back then are sitting on 40% gains. I still like it here and recommend buying on any pull back.

Jacobs Engineering (JEC) – Jacob’s Engineering develops buildings that make cities thrive. This includes engineering, constructing, operating and maintaining a diverse array of facilities including oil refineries, chemical plants, hospitals and bridges to name a few. It seems like every week they win a new contract for something or the other – and with clients like Wyeth, Lyondell, Novartis, Total, various federal governments, state and city municipalities, JEC is in a unique position to take advantage of global economic expansion. In fact, the company has operations in North America, the United Kingdom, Europe, India, Australia, and Asia.

The most recent quarter showed earnings up more than 45% over the prior year and a back log of $11 billion – a 17% increase over the same time last year. Not only did they beat earnings estimates, but also guided higher for the year. If the market remains strong, the stock could see $100 before year end.

Veolia (VE) – In the last month, Veolia, the French water company announced two important deals. The first is a $943 million contract to build a desalination plant in Saudi Arabia and the second, a 20-year contract worth around $785.6 million to build and operate a desalination plant in Sydney.

While Veolia has 4 major business segments including Water, Environmental Services, Energy and Transportation, the two that I find very attractive are Water and Environmental Services. The company provides water and wastewater services, such as management and operation of drinking water plants, wastewater decontamination and recycling plants, drinking water distribution networks, and wastewater collection networks. Additionally, it also provides waste management and logistical services, which include waste collection, waste treatment, cleaning of public spaces, offices, and factories, maintenance of production equipment; treatment of polluted soil, and management of waste discharge at industrial sites. Water desalination, purification, filtration and irrigation are a major part of Veolia’s portfolio.

The company also has long term projects in China, Africa and the middle-east. With the investment climate in France as favorable as it is with the recent election results, this company is an ideal play on worldwide water shortage and while the run up from the sub-60 level over the last year might be a little excessive, the recent 10 point pull back has brought the stock to more acceptable levels. Oh and don’t forget the 3% dividend.

Potash (POT) – The world population is growing. Trade and economic expansion is taking hold and the people of developing countries in Asia, Africa and South America are stepping out of the shadows of poverty, and for the first time, are eating more and better. The additional foods being consumed require more crops including sugar, corn, coffee, wheat, rice, beans and all the vegetables you can think of. Potash is the largest integrated producer of fertilizer, industrial and animal feed products that are used to grow food and crop.

The company has a distinct advantage over competitors like Mosaic (MOS) and Agrium (AGU) because it is the single largest producer of potash fertilizer and owns most of the world’s excess potash capacity. It also has investments in Israel, Jordan, China and Chile and its products boast the highest margins in the business.

Potash has been one of the best performing stocks on the NYSE this year. It has run up from $28 this time last year to $80 today and sits less than 10% from its 52-week high. The stock performance is primarily due to Potash’s earnings, which rose 53% and 63% the past two quarters. I recommend waiting for a pull back before buying.

Freeport McMoran (FCX) – This company is a copper and gold mining outfit with almost exclusive mining rights in Indonesia. Demand for new buildings, cell phone towers, cable lines and infrastructure across Asia and Europe translates to high demand for copper and Freeport McMoran made the right move last year by acquiring Phelps Dodge.

The company grew revenues at 112% and profits at 85% the last time it reported, and yet trades at a PEG ratio of just 0.3. At last count, operating margins stood at a whopping 50%. During a time when Gold and Copper prices have shown stability, FCX has been improving earnings and margins by leaps and bounds. Both these metals look like they are about to break out to the upside and that will only help FCX.

-- Faisal Laljee
Full Disclosure: I am long POT but my positio can change anytime without notice