Stocks are often a great predictor of what’s to come in the economy. That’s certainly been the case for natural gas. Over the past few weeks, Cramer has pointed out the sector’s big moves, telling viewers to expect the commodity to follow. Well, in the past week alone natural gas is up 40%.
Cramer said he expects nat gas to double next year, making $6 or $7 per thousand cubic feet very likely. He’s offered up a number of plays on the trend – Devon Energy , Anadarko Petroleum , Apache – and on Thursday he offered one more: Range Resources.
As a wildcatter, Range Resources drills in those hard-to-reach places, mostly in Pennsylvania’s Marcellus Shale. Marcellus accounts for 86% of the company’s 19.1 trillion cubic feet to 26.1 trillion cubic feet of reserve potential, with the rest located in Virginia’s Nora Field and the Barnett Shale in Fort Worth, Texas. This year’s production is expected to be higher than initially scheduled, and 2010’s production rate should be double that of 2009.
Range Resources keeps a sold balance sheet, with no debt coming due until 2012. Also, the company might raise additional cash by selling non-core assets. And this is a low-cost producer, which is great for the margins. The stock has almost doubled off its lows, Cramer said, but it “still has room to go much higher.”
To find out if he’s right, Cramer invited CEO John Pinkerton onto Mad Money. Watch the video for the full interview.
Cramer's charitable trust owns Devon Energy.
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