Heirs Apparent With Mouth-Watering Prices

In a recent interview, Jeremy Grantham summed up the conundrum that is the current stock market: Many assets are so cheap you almost have to buy them.

In all likelihood, the stock market is going to go lower -- Jim Cramer has pointed out repeatedly on RealMoney that the cheap can indeed become incredibly cheap. However, stocks in good companies like Darling International (DAR - commentary - Cramer's Take) and Hilltop Holdings (HTH - commentary - Cramer's Take) are selling for prices that are hard to resist.

Watch where the money is going to flow in the next few years: The incoming president gave another speech last week outlining his plans to create jobs and rebuild the economy, describing the largest infrastructure spending program since the 1950s, when the interstate highway system was developed. He has plans to wire schools and hospitals for Internet access. With a majority in Congress supporting him, he is going to pass and enact his plans, whether you are a fan of Keynesian policies or not.

With so many stocks so cheap, it makes sense to find cheap stocks that will be recipients of the government's largess in the next four years. I have talked endlessly about the infrastructure companies and the opportunities in that area. I would be adding to positions in well-financed companies in the infrastructure space on the inevitable down days.

However, it's important to take a long-term focus and tiptoe into positions -- more than ever, avoid debt-laden companies that may struggle to meet interest payments in 2009 and be forced to reorganize. There are a lot of high-quality companies with little or no debt where you can invest your money.

Even as the market has sold down, we have seen stocks like Granite Construction (GVA - commentary - Cramer's Take) and LB Foster (FSTR - commentary - Cramer's Take) recover from the October carnage. Foster Wheeler (FWLT - commentary - Cramer's Take) is off its lows, but the stock is still down more than 70% in the last year. This company has a global presence in key infrastructure markets and more than $1 billion on its balance sheet. It carries some debt, but less than 20% of the cash available -- it could be paid off tomorrow with around $900 million remaining in the bank.

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At the time of publication, Melvin was long FSTR, although positions may change at any time.

Tim Melvin is a writer from Stevensville, Maryland, who spent 20 years a stockbroker, the last 15 as a Vice President of Investments with a regional firm in the Mid Atlantic area. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Melvin appreciates your feedback; click here to send him an email.