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This Is Cramer's Fave Oil Play

As stocks rallied after a sharp sell-off, Cramer on Thursday said investors have to be careful. There are some great values among the rubble, but he said it's important to separate the trash from treasure.

With that in mind, Cramer drew attention to his fave oil stock: EOG Resources . He called it the most undervalued stock out there. The company is finding lots of oil and is the best way to play the unconventional shale opportunities. After all, it's the top producer in North Dakota's Bakken shale, as well as the Eagle Ford shale in Texas, which are two of the biggest oil discoveries in the last 40 years.

The company also delivered strong earnings last Thursday. Yet the stock is not reflecting the incredible underlying strength in this company, Cramer said. He thinks things will only improve, too, as EOG will be able to sell its oil on parity with the much higher Brent price, not the West Texas price it's been tied to.

Cramer thinks investors can starting buying EOG now, but suggests waiting for it to go lower before buying more. He would also scale into it slowly.

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