'RealMoney' Radio Recap: Back to Nature

Natural resource stocks have been flooded with buyers, said James Cramer on his "RealMoney" radio show Thursday, and the situation is only going to intensify next week.

The reason, said Cramer, is that at the beginning of the quarter, mutual funds and hedge funds will be seeing new money, which they'll use to buy stocks they know and that have been working for them. That means many will be buying natural resource stocks.

Is the "relentless buy interest" in natural gas, drillers, coal, copper and mineral stocks extreme? Cramer asked rhetorically. In the past, for example, Phelps Dodge (PD Quote) has raised its dividend during good times to a point where the stock yielded 6% to 7%, said Cramer. It currently yields just 1%, he said.

Additionally, EnCana (ECA Quote) CEO Gwyn Morgan predicted back when natural gas was about $6 that his company's market value could double if natural gas doubled. It's now about $12, and EnCana has doubled. Perhaps the company's market value could double again, said Cramer, if natural gas goes to $20 or $30 this winter, which is where Cramer thinks it will go.

The bottom line, said Cramer, is "you have to own some of these stocks." Cramer would sell underperforming drug, beverage, paper or chemical stocks and buy natural resource stocks. He likes EnCana, which he says is the "cheapest" natural gas stock in America. He also likes Chesapeake Energy (CHK Quote), the "second cheapest." Cramer also likes driller Nabors Industries (NBR Quote) and rig manufacturer National Oilwell Varco (NOV Quote). The "cheapest pure domestic oil and gas play" is Cimarex Energy (XEC Quote), said Cramer, because the company has the lowest multiple of gas to cash flow.

In response to a question on Japan, Cramer said "Japan is for real," and he likes Mitsubishi Tokyo Financial Group (MTF Quote) and the iShares MSCI Japan (EWJ Quote).

Commenting on health care, Cramer reiterated his bullishness on UnitedHealth Group (UNH Quote), saying he expects a tremendous blitz by UNH in the next 10 days to enroll seniors under the new Medicare prescription drug plan.