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PetroProfits

Tuesday, 8 Jan 2008 | 11:15 AM ET

Petrobras Energia – not to be confused with its parent company Petrobras – is a risky, under covered and underexposed Latin American energy stock that could be poised for big gains, Cramer said on Monday’s Mad Money.

Cramer on PZE
PZE is risky, but Mad Money host Jim Cramer thinks its potential reward could be worth your while.

PZE does most of its oil and gas exploration and production in Argentina, but also operates in Venezuela, Peru, Ecuador, and Brazil. It operates petrochemical, refining, transport and electricity businesses in Argentina, Ecuador and Brazil. Cramer noted that PZE does not explore in Brazil, which is where parent Petrobras is dominating.

Now, PZE doesn’t exactly do business in the most stable, capitalist-friendly countries around, Cramer acknowledged, but just a hint of economic liberalization there could send the stock much higher. And with oil scraping $100, even Latin America’s highly-regulated price controls can only do so much to eat into PZE’s profits.

But the big reason why Cramer thinks PZE could stand to go higher is because, simply, it’s serially under covered on Wall Street. Only five analysts cover the stock and there’s only one buy rating among them. Under the radar stocks – especially energy stocks – always have huge potential to shoot up, Cramer said.

Finally, Argentina’s energy market is showing signs of picking up. The country’s largest energy producer just sold a stake in itself and pricing there has gotten stronger, especially in the refining business. Since PZE does two-thirds of its business in Argentina, Cramer said it’s a great way to play the country’s potential energy comeback.

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

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