GO
Loading...

Cramer: Gulf Spill Won’t Break BP

The media may portray BP’s exploded oil rig and the resultant oil leak as something that can “wipe out” the company, Cramer said Monday, but he doubted that would happen.

BP has taken full responsibility for the spill and its cleanup costs, The New York Times reported, and some seem to wonder if the company will buckle under that outlay of cash. But Cramer pointed to a number of factors that will help BP weather the storm. Not the least of which is the company’s “incredible” debt-to-capital ratio and its strong management team.

Also, though, as The New York Times reported on Monday, BP has made progress with its containment domes. According to the Times, these 4-story, 70-ton structures will be lowered into place over the three leaks to catch the escaping oil and allow it to be pumped to the surface. One had been completely built, the company said, and the other two were expected to be done on Tuesday.

“The game changed,” Cramer said, when that report hit the wires today, at about 2 PM ET. That caused BP to turn, as well as Transocean and the Oil Services HOLDRs exchange-traded fund.

“If the Times article is true,” Cramer said, “the worst is over.”

Still, Cramer recognized that BP will foot the bill for the cleanup, though he remains “optimistic” that damage done won’t be on par with Union Carbide’s gas leak in Bhopal, India, or even the Exxon Valdez off the coast of Alaska.

Elsewhere in the market, Cramer recommended California homebuilder Standard Pacific , saying he thinks the near $7 stock could go to $8. He sees the company’s ability to raise prices on its properties as bullish, and he predicted SPF will sell out its inventory.

“It’s my best name in the group,” Cramer said.

Cramer's charitable trust owns BP.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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

Symbol
Price
 
Change
%Change
BP.
---
RIG
---
SPF
---
XOM
---
MV OIL SVCS
---

Featured

Contact Mad Money

  • Showtimes

    U.S.
    Monday - Friday 6p ET
    Australia
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.