Vulcan Materials Co. and Martin Marietta Materials Inc., the two biggest U.S. producers of road-construction materials, are worth buying because of more government spending on the country's highway system, Jim Cramer said on his ``Mad Money'' television program on CNBC.
Highway and street funding has risen 13 percent during the past six months while new highway contracts increased 23 percent through May, said Cramer, a market commentator and former hedge-fund manager.
Prices for crushed rock used to make roads are unlikely to fall because the costs Chinese and Japanese producers would incur by shipping products to the U.S. prevent competition from overseas, Cramer said.
Vulcan Materials is buying back stock and may get business from the state of California, where $140 billion of road construction needs to be funded, Cramer said.
Alon USA Energy Inc., an oil refiner and fuel marketer, is worth buying because of rising demand for its asphalt, a by-product of its oil, Cramer said. Ingersoll-Rand Company Ltd. may rise because its paving business made up 11 percent of the company's revenue, Cramer said.
Ashland Inc., the biggest North American road builder, is worth buying because its Ashland Paving and Construction unit may attract as much as $2.5 billion in an acquisition, said Cramer, who added that the stock may advance on its earnings results, scheduled for release next week.
Cramer recommended Caterpillar Inc., the world's largest maker of earthmoving equipment, because he said demand for trucks to transport crushed rock will rise. Nutri/System Inc. is also worth buying, Cramer said.
Investors should avoid Granite Construction Inc., a building contractor, because much of its revenue is dependent on housing demand, which is falling, Cramer said.
CSX Corp., Schlumberger Ltd., United Technologies Corp., Textron Inc. and Motorola Inc. will fall until early next week, then rise because of positive earnings results and the possibility that the Federal Reserve will drop interest rates in October, Cramer said.
Cramer recommended Alcan Inc., SGL Carbon AG, Sealy Corp., General Motors Corp., Walt Disney Co., News Corp. and Energy Partners Ltd. in response to questions during the show's regular ``Lightning Round'' segment, and Advance Auto Parts, Inc. and Vaalco Energy, Inc. during a second, shorter round.
He also told viewers to avoid Texas Instruments Inc., Select Comfort Corp., Ford Motor Co. and Hansen Natural Corp. during the regular round, and Sealed Air Corp. during the second round.
Cramer suggested that investors should buy Valero Energy Corp. if it falls to $56 a share and Ametek Inc. if it drops by $3 a share. Burlington Northern Santa Fe Corp., Union Pacific Corp. and CSX are worth buying after sellers finish their current sell-off and before the stocks rebound starting next Tuesday, Cramer said.
Cramer said he owned Ingersoll-Rand Co., Alcan Inc. and News Corp. for his charitable trust.