Cramer's undervalued energy stock

If the S&P had a giant bargain table in the basement, this stock might be featured front and center.

Of course, market doesn't quite work that way but in the case of Marathon Oil, it may as well.

Cramer says at Wednesday's analyst meeting Marathon gave plenty of reasons for shares to rally, yet they barely budged.

And when Cramer factor's those catalysts into share price, his result equals a pretty nice bargain at $36.

Andrew Dernie | Stockbyte | Getty Images

"First of all, management said that next year they're increasing their rig count in the Bakken and the Eagle Ford by 20%, and they're doubling their rig count in Oklahoma's Woodford shale," Cramer noted.

All of these areas are places that hold vast untapped energy reserves that Cramer believes will transform not only the industry but the nation. In other words, the new rigs are in the right place at the perfect time.

"Second, Marathon told us that it plans to sell off its cash cow North Sea assets off the coasts of the UK and Norway in order to raise cash and simplify their holdings," Cramer added

The Mad Money host believes the Street will also view the sale as bullish.

"And third, the company announced a massive increase in its buyback, raising the repurchase authorization from $1 billion to $2.5 billion—that's equal to 10% of the market cap here, a serious buyback that could be very meaningful to the stock."

That speaks for itself.

And, "The stock is selling for just 11.8 times next year's earnings estimates with a 10% growth rate," Cramer added.

Yet, despite the tailwinds shares of Marathon closely flat. In fact shares are trading at the same levels as a month ago.

Read More from Mad Money with Jim Cramer
Is Apple stock returning to greatness?
Cramer: Volcker rule bullish for banks
Clothing maker with spiffy stock

Cramer thinks the price action is simply due to broad fears about Fed tapering as well as profit taking.

Therefore, Cramer thinks bargain hunters could have a deal on their hands. "I think Marathon may be very undervalued," he said.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

Contact Mad Money

  • Showtimes

    Monday - Friday 6p ET
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • Jim Cramer

    Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.

Mad Money Moments

Cramer's New Book