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Cramer's 'Mad Money Recap': The Natural Gas Boom

TheStreet.com Staff

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Democratic presidential hopefuls Hillary Clinton and Barack Obama should drop their windfall profit tax proposals for the oil industry, Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

Cramer said those proposals, in particular, would have a negative impact on natural gas drillers at a time when natural gas represents a clean, plentiful source of energy that could easily lead the country towards energy self-sufficiency until better alternative options are viable.

Cramer has touted the growth of the industry, going so far as calling 2008 "the year of natural gas." He especially likes Anadarko Petroleum (APC Quote - Cramer on APC - Stock Picks), which he called a "must buy" on March 25.

Since that recommendation, Anadarko shares are up $11.51, and Cramer says the stock could rise to $100 in the next 18 months.

Cramer extended his optimism to the entire natural gas sector. With the growth rates for a natural gas drillers averaging 15%, he said investors will be hard pressed to find such high growth in any other sector. He also mentioned the sector's excellent visibility as another plus.

Rounding out his favorite natural gas drillers, Cramer also recommended Devon (DVN Quote - Cramer on DVN - Stock Picks), Apache (APA Quote - Cramer on APA - Stock Picks), Southwest Energy (SWN Quote - Cramer on SWN - Stock Picks), Ultra Petroleum (UPL Quote - Cramer on UPL - Stock Picks) and Encana (ECA Quote - Cramer on ECA - Stock Picks).

In addition, he mentioned XTO Energy (XTO Quote - Cramer on XTO - Stock Picks), El Paso (EL Quote - Cramer on EL - Stock Picks), and ConocoPhillips (COP Quote - Cramer on COP - Stock Picks). He owns all three stocks for his Action Alerts PLUS portfolio.

Cramer also had positive comments for Nabors (NBR Quote - Cramer on NBR - Stock Picks) and Halliburton (HAL Quote - Cramer on HAL - Stock Picks).

Regarding the prices of oil itself, Cramer raised his price target from $125 to $150 a barrel. He told viewers that they "haven't missed the move yet."

A Big Upside Surprise

Cramer wore a brown paper bag on his head to hide his embarrassment for having recommended NYSE Euronext (NYX Quote - Cramer on NYX - Stock Picks) for the past year.

The company, though, turned things around in the past quarter and enjoyed a surprise to the upside. Cramer said that the turnaround was due to the leadership of CEO Duncan Niederauer.

Niederauer told Cramer that the quarter's results were the first to fully reflect the integrated NYSE and Euronext components. He said that the quarter proved the combined company is ready to handle record trading volumes without incident and investors should trade with confidence.

Niederauer also said much of his energy is now focused on the expense side of the business. He mentioned that the projected cost savings from the merger of $70 million a year hasn't fully kicked in yet, and that there's still additional cost savings to be realized.

Regarding the pending acquisition of the American Stock Exchange, Niederauer said they're ahead of schedule on closing the deal, and he expects that merger to be another great example of the synergies that can come from combining exchanges.

Cramer commended Niederauer for a job well done, saying, "NYX works."

Misjudging Comcast

Cramer apologized to viewers for staying too negative, too long on Comcast (CMCSA Quote - Cramer on CMCSA - Stock Picks) and missing the bottom in the stock.

In an effort to have viewers learn from his mistakes, Cramer said that he was too focused on Verizon (VZ Quote - Cramer on VZ - Stock Picks) and AT&T (T Quote - Cramer on T - Stock Picks), and mistakenly thought that additions of subscribers at those companies were coming at the expense of Comcast. In reality, this was not the case.

Cramer said "there is still a lot of growth left for cable." He said Comcast is enjoying growth in high-speed Internet customers as well as in cable TV subscribers from the upcoming analog-to-digital switchover.

Cramer also said he mistakenly assumed Verizon's FiOS fiber service would kill cable. There, he said he failed to consider that FiOS is only available in 22.9% of Verizon's coverage area. Comcast is the better alternative where FiOS isn't available, he acknowledged.

Comcast also surprised Cramer with its ability to compete with the phone companies by using aggressive marketing and by adding more features to its lineup.

Cramer also mentioned his surprise at Comcast listening to activist investors and buying back some of its stock, implementing the company's first dividend and cutting the multimillion-dollar benefit package of founder Ralph Robertson to $1.

Finally, Cramer said he misjudged Comcast's ability to fix its customer service problems. "Competition forced the company to address their issues," he said, citing the company's reduced repair calls for the most recent quarter.

Cramer said he thinks Comcast looks good here and is worth buying.

Waste Management: Part II

Cramer again welcomed David Steiner, CEO of Waste Management (WMI Quote - Cramer on WMI - Stock Picks) to the show to discuss his company's outlook.

Steiner said that most of Waste Management's business is recession-proof and the company has a lot of leverage to bring to the market. While volumes had slowed down in previous quarters, they began to rebound in April and he expects the company to still meet its numbers for the year.

Steiner noted fuel costs are a concern, but most of those increased costs have been passed onto the customers via fuel surcharges. He also highlighted some of the company's push towards fuel efficient technologies and its efforts to cut fuel costs.

Cramer reiterated his buy on Waste Management.

Final Notes

Cramer said the strength in Precision Castparts (PCP Quote - Cramer on PCP - Stock Picks) and Molson Coors (TAP Quote - Cramer on TAP - Stock Picks) should be the signal for investors to roll into Alcoa (AA Quote - Cramer on AA - Stock Picks) and Altria (MO Quote - Cramer on MO - Stock Picks).

Lightning Round

Cramer was bullish on Hewlett-Packard (HPQ Quote - Cramer on HPQ - Stock Picks), Natus Medical (BABY Quote - Cramer on BABY - Stock Picks), Marathon Oil (MRO Quote - Cramer on MRO - Stock Picks), Diana Shipping (DSX Quote - Cramer on DSX - Stock Picks), Frontline (FRO Quote - Cramer on FRO - Stock Picks), Deutsche Telekom (DT Quote - Cramer on DT - Stock Picks), Verizon (VZ Quote - Cramer on VZ - Stock Picks), AT&T (T Quote - Cramer on T - Stock Picks), Manulife Financial (MFC Quote - Cramer on MFC - Stock Picks) and Agnico-Eagle Mines (AEM Quote - Cramer on AEM - Stock Picks).

Cramer was bearish on Western Refining (WNR Quote - Cramer on WNR - Stock Picks), Valero Energy (VLO Quote - Cramer on VLO - Stock Picks), Sprint Nextel (S Quote - Cramer on S - Stock Picks), China Digital TV (STV Quote - Cramer on STV - Stock Picks), Vulcan Materials (VMC Quote - Cramer on VMC - Stock Picks), MGM Mirage (MGM Quote - Cramer on MGM - Stock Picks), Wynn Resorts (WYNN Quote - Cramer on WYNN - Stock Picks), Coeur d'Alene Mines (CDE Quote - Cramer on CDE - Stock Picks), Advanced Micro Devices (AMD Quote - Cramer on AMD - Stock Picks) and Smith Wesson (SWHC Quote - Cramer on SWHC - Stock Picks).

Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

For more of Cramer's insights during the Lightning Round, click here.