A Great Moment in Nat Gas

The world is awash in natural gas. We hear it over and over again. But we don't seem to realize that that's why natural gas is at $3.50: The pricing reflects unlimited natural gas and endless importing.

Now, the stocks haven't "kept pace" with the decline in the futures ... until last week and today. But now you are seeing Apache (APA - commentary - Trade Now) at $66 and Devon (DVN - commentary - Trade Now) under or flirting with $50, and these prices are starting to reflect that decline again, having been bid up in the false breakout above $4. (Elsewhere, Don Dion has a piece on the U.S. Natural Gas ETF (UNG - commentary - Trade Now) worth running to!)

To me, we are looking at a moment where the companies are in great shape to make some moves. Anadarko (APC - commentary - Trade Now) did a gigantic secondary at $45 and the stock is at $40. We know that Chesapeake (CHK - commentary - Trade Now) is itching to do a deal. We know that Devon's big Gulf properties are going to come on-stream next year. We know that Continental Resources (CLR - commentary - Trade Now) has a gigantic and cheap set of assets that could be worth far more to someone else that needs reserves. Southwestern (SWN - commentary - Trade Now) just pulled back huge from its ramp even though we know that it has incredibly cheap Barnett Reserves.

You've had to buy these stocks when they are weakest. I know that they are not "done" being weak. But I know that they are better buys than sells down here.

Random musings: Everyone is loving the defensives now. That rotation, caused by double-dip fears, has been known to last for about three days. Are we overstaying our welcome? On the ones that have run where the fundies are not-so-hot or are built in, yes -- Coke (KO - commentary - Trade Now) and Procter (PG - commentary - Trade Now) come to mind.

At the time of publication, Cramer had no positions in the stocks mentioned.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.