Cramer: These Nat Gas Plays Are ‘Massively Undervalued’

Executive Decision
Executive Decision   

Cramer on Monday named natural gas as one of his big investing themes for 2010, saying that a worldwide energy shortage will boost demand for the cleaner fossil fuel, especially in the US. In addition to recommending Chesapeake Energy , Ultra Petroleum and a host of others, he also endorsed Anadarko Petroleum , a stock he has liked since Mad Money first launched five years ago.

A quick look at the numbers shows us why: Over those five years, Anadarko has returned 111%, versus 5% for the S&P 500. If you go back a decade, the number jumps to 290% versus the S&P’s -24%. And since 1990, APC has soared 613% while the benchmark index has climbed only 199%.

Cramer praised Anadarko for its intended focus this year on Pennsylvania’s Marcellus Shale. These shale plays are “massively undervalued,” he said, and they are at the heart of what’s become a US natural-gas rush. Total’s purchase of 25% of Chesapeake Energy’s Barnett Shale assets, which Cramer said was one of a number of coming acquisitions in the space, seemed to confirm this.

But Anadarko has an overseas footprint, too, with properties in Algeria, Brazil, Ghana and the Gulf of Mexico. The company has a great track record for finding oil and gas, Cramer said, which is yet another reason he recommended APC.

“I think Anadarko is a fabulous play on the global energy shortage and the domestic natural-gas rush,” Cramer said.

He invited CEO Jim Hackett onto Mad Money for an update on the company. Watch the full interview for the latest on Anadarko Petroleum.

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