Even though energy prices have stalled lately, Jim Cramer is still on the hunt for interesting plays. In fact, while the group has been taking a breather, Cramer thinks this is a terrific opportunity to do some buying.
"Given that, I expect the energy cohort to move higher, maybe even a lot higher over the long term because so much capacity is being shut down as producers run out of money to drill," the "Mad Money" host said.
The energy space can be very treacherous, especially since many companies could be in major trouble if there is another leg down in oil prices. Cramer was extremely careful when picking energy equities, because it is best to own only the highest quality companies that will let him sleep at night.
That is why Cramer turned to the tanker business, specifically Nordic American Tanker. In the past year it is up more than 100 percent, even as the energy sector struggled.
Nordic American Tanker has a fleet of 23 oil tankers that they can lease to clients who are looking to either ship or store crude. That means the dynamics of the tanker industry are very different from that of an oil producer or the offshore drillers that also lease their equipment.
The tanker business has almost nothing to do with the price of crude. If anything, lower crude prices are a good thing, because tanker companies can benefit by providing more ships to transport oil that is part of the production glut from places like Saudi Arabia.
At the same time, there is also more demand from speculators who want to use the tankers as giant storage containers because there is no other place to put excess oil as they wait for the price to go higher.
"After years of underperformance, things have finally turned around at Nordic American Tanker, and even though the stock has already doubled in a little over a year, I think it has more room to run," Cramer said. (Tweet this)
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Cramer based this judgment on the fact that the fundamentals of the tanker industry are looking solid right now, and he thinks they will stay that way for a long time. He specifically chose Nordic American because it has juicy yield of 9.7 percent, and he considers its balance sheet to be about the best in the industry.
He also thinks it has the best fleet in the business, as all of their ships are less than 20 years old and in excellent technical condition.
"Right now, the tanker space is on fire, and Nordic American Tanker is the best company in the group," Cramer said. (Tweet this)
The "Mad Money" host recommended buying the stock on weakness, particularly if it trades below $15 because the yield will go above 10 percent. Ultimately, Nordic American could be a great long-term way to play the energy business.