Mad Money

At $28, this energy stock a bargain: Cramer

"I could easily see this $28 stock trading to the mid $30s by the end of the year," said Cramer. "And after that I don't think $40 is far-fetched."

Jim Cramer was referring to Canada-based Cenovus Energy, a company whose stock, he thinks, the Street will soon realize is undervalued.

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Part of the underperformance has to do with an operational issue in which struggled to extract oil efficiently from its located in the Canadian Oil Sands. "This led to a series of disappointing numbers," Cramer explained.

Since that time, "The market has been taking a wait and see approach," looking for numbers to confirm a rebound.

The "Mad Money" host believes the market's caution is your opportunity.

He says not only has Cenovus outlined plans to stem the issue, the company is actively turning it around right now. He believes efforts should pay-off beginning in the second half of this year.

Therefore Cramer says it's prudent to establish a new position now, before the Street takes notice.

Because once the Street does take notice, Cramer says there will be a lot to like.

In addition to the turnaround, Cramer noted that Cenovus has other assets that could generate a significant bounty of oil and gas. Also, "Cenovus holds 50% interests in two Phillips 66 heavy oil refineries in Illinois and Texas," Cramer said.

And, on top of that, Cramer says Cenovus is actively exploring new areas of opportunity that could also generate significant returns.

All told, Cramer said, "I just don't think Cenovus is getting enough credit for its assets.

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Therefore, he believes the risk is well worth the reward.

Currently the stock is trading around $28. "It's 52-week low of $25 and change should be a floor because at that level, it would yield 3.8 percent. However, upside here could be significant if it can deliver on its promise." As noted above, "I could easily see this $28 stock trading to the mid-$30s by the end of the year," said Cramer. "And after that I don't think $40 is far-fetched."

Call Cramer: 1-800-743-CNBC

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