When Nabors CEO Gene Isenberg comes on Mad Money, viewers can expect he’s going to give the real deal about his company. After all, he’s the guy who once told Cramer that he didn’t think the time was right for people to buy his stock.
But that’s changed. Now Nabors is right again, he said.
Nabors is an oil and gas land driller, based in Bermuda, that has contracts throughout the U.S. and Canada. For a while, the company was hurt by a steep decline in North American onshore drilling. But the tide looks like it’s turning as giant fields like the Marcellus Shale come online and the major drillers are repositioning themselves with new plans as the country enters what Cramer called a “gas rush.”
For some time, the land drillers suffered from too much capacity, but new demand for onshore rigs coupled with a drop in construction has led to an easing of the supply glut – and now Isenberg said Nabors is prepared to take advantage.
The Marcellus Shale, located beneath several eastern U.S. states, is only one major area that Nabors is preparing to explore. Isenberg said the company is going to do “as much drilling as possible” there and in other locations across the country and in Canada to keep up with the surge in demand for natural gas (researchers estimate that the Marcellus Shale alone could contain over 50 trillion cubic feet of natural gas worth as much as $1 trillion). Nabors already has a fleet of rigs ready to use and that idle capacity is going to give the company an edge when its competitors are scrambling to build, Cramer said.
After the “not so hot” quarter Nabors reported Tuesday – a quarter that sent the stock screaming to a 52-week high – Cramer thinks it’s still cheap and he recommends buying it here. Natural gas is going to be a crucial part of the energy complex going forward, as he’s known to say, and Nabors is the company that he thinks is best prepared to deliver.
Isenberg isn’t going to argue there. “You’re exactly dead right,” he said.
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