GO
Loading...

Cramer’s Play on High Oil Prices

Oil has become remarkably resilient in this market, “Mad Money” host Jim Cramer said Monday. But since many stocks in the oil complex are trading as though the price of crude will fall back to $80 any day now, there are many bargains out there for savvy investors. One of those bargains is Fluor, Cramer said.

“[It's] a terrific way to play this new era ... of persistently high oil prices,” he said.

The engineering and construction company builds new oil and gas facilities, constructs new power plants and refurbishes aging infrastructure for oil and gas companies. Cramer considers it an oil play because 60 percent of its capital projects are oil and gas related.

“Reputation is everything,” he said, “and Fluor is known for providing exceptional services and technological know-how across every phase of every contract.”

Plus, the company has a $43 million backlog, and Cramer thinks how much business a company has in its pipeline is the best way to gauge the strength of the business. Two-thirds of that backlog is oil and gas related.

Fluor is also incredibly cheap, Cramer said. It’s trading at 14 times next year’s earnings estimates, well below its average historical multiple of 19 times earnings. He thinks the stock has a tremendous amount of room to run.

“If the stock gets dinged later this week off bad news that I'm expecting from Europe,” he said, “I would jump all over it.”

When this story was published, Cramer's charitable trust owned Fluor.

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
FLR
---

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.