Cramer: 2010’s Biggest Investing Themes
For Mad Money’s first episode of 2010, Cramer started a weeklong series on what he thinks will be the year’s biggest themes. Rather than try to guess where the Dow will be 12 months from now, he wanted to show viewers what sectors were working and the best stocks to play them. On Monday, Cramer returned to one of his favorites: natural gas.
His enthusiasm for the commodity stems from what he sees as a worldwide energy shortage. And the situation will get even worse as the global economy picks up and the consumption of oil and gas grows and grows. As a result, Cramer said, “These stocks should be great plays for 2010,” Cramer said.
While the Mad Money host likes Baker Hughes and Weatherford International among the oil-services names, with Marathon Oil and Chevron being his favorite integrated companies, he has all but made a crusade out of natural gas. Cramer has called the commodity the bridge fuel we need kick our addiction to foreign oil. It’s cleaner than crude and coal, and the US is sitting on tons of it. And if Congress took up the cause, the resultant nat-gas build-out could generate some much-needed jobs in this country.
Recent M&A activity in the sector seems to indicate that Cramer’s not alone in his thinking. Exxon Mobil announced it will take over XTO Energy, and just today French outfit Total announced its purchase of a 25% stake in Chesapeake Energy’s Barnett Shale assets. It looks like the big boys want in, and Cramer expects more deals to follow.
So which nat-gas stocks are worth buying? Cramer gave the thumbs-up to everyone from Chesapeake and Devon Energy to Southwestern and Ultra Petroleum . He also likes Apache , EQT , Continental Resources , Range Resources and one other name he highlighted later in the show.
His one caveat was about Linn Energy . As much as Cramer likes the big 9% dividend yield, the stock has run too much – 70% – since his May 20 recommendation. He wouldn’t sell LINE, he said, but he couldn’t recommend buying it at this level either.
Cramer’s bottom line? Focus on the big themes of 2010, and the energy shortage is definitely one of them. It should bring with it “huge opportunities,” he said, especially in US natural-gas names.
Cramer’s charitable trust owns Chevron, Marathon Oil and Weatherford International.
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